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Clinton's NAFTA: Forced Mexico Allow Foreign Ownership Banks: Mexican taxpayers Subsidize CitiBank
A little-known clause in NAFTA meant that Mexico had to allow foreign ownership of its banks (and major industries).
So, Clinton Treasury Secretary, Robert Rubin, of Citi Bank, took over Banamex, Mexico's largest bank. It subsequently had to be "rescued" by the Mexican government---and Mexican taxpayers----so that foreign investors would not suffer.
CitiGroup was then allowed to buy/takeover Mexico's remaining largest airline, Aeromexico, although there were Mexican businessmen who had submitted a better bid for the airline. Mexican taxpayers had to foot the bill for all of this foreign ownership.
.... Zedillo rescued the Too Big to Fail Banamex by buying its largely worthless portfolio of uncollectible loans–on credit. Mexican taxpayers are still paying Banamex interest for the government purchase of the bank’s junk securities a dozen years ago. The exact amount of the subsidy is buried in obscure government accounting, but a 2004 estimate was that the government still “owed” Banamex roughly $4 billion.
In 2003 the Mexican government subsidy to the banking industry–by then almost totally owned by foreign corporations–was three times what it was spending on roads, school buildings, health facilities and other infrastructure. This, in a country where 42 percent of the people don’t earn enough to support a minimum Mexican market basket of food, clothing and other essentials.
In 1999 Rubin resigned as Treasury Secretary to become chair of the executive committee of Citigroup. Two years later, shortly after the date on which Mexico had to open up its banks to foreign ownership, Rubin flew to Mexico to buy Banamex for $12.5 billion plus a seat on the Citigroup board for Hernández. The Mexican press reports that the well-connected Hernández masterminded the Aeroméxico deal, which will provide Citigroup/Banamex with substantial revenues from financing airplane leases and insurance, along with being the preferred banker for the airline’s suppliers.
As the icing on this very lucrative cake, the Calderón government decided that the Citigroup/Banamex gang should not have to pay the normal sales tax. Sales taxes, it was explained with a straight face, really fall on the seller, not the buyer (try this out next time you go to the store), and since the seller was the government, there is no point in the government paying the sales tax to itself. Neat. No wonder the Citigroup board just elected Rubin to be its chair.
So here is your global free enterprise system (a k a socialism for the rich) at work: Citigroup/Banamex, which is Too Big to Fail in the United States, has also been deemed Too Big to Fail by the Mexican government and is being subsidized by Mexican taxpayers to buy Aeroméxico, also Too Big to Fail.
The World Bank, IMF and other neoliberal hangouts are still pushing developing countries to open up their financial markets to multinational banks, precisely on the grounds that it will eliminate crony capitalism. ....
In 2003 the Mexican government subsidy to the banking industry–by then almost totally owned by foreign corporations–was three times what it was spending on roads, school buildings, health facilities and other infrastructure. This, in a country where 42 percent of the people don’t earn enough to support a minimum Mexican market basket of food, clothing and other essentials.
In 1999 Rubin resigned as Treasury Secretary to become chair of the executive committee of Citigroup. Two years later, shortly after the date on which Mexico had to open up its banks to foreign ownership, Rubin flew to Mexico to buy Banamex for $12.5 billion plus a seat on the Citigroup board for Hernández. The Mexican press reports that the well-connected Hernández masterminded the Aeroméxico deal, which will provide Citigroup/Banamex with substantial revenues from financing airplane leases and insurance, along with being the preferred banker for the airline’s suppliers.
As the icing on this very lucrative cake, the Calderón government decided that the Citigroup/Banamex gang should not have to pay the normal sales tax. Sales taxes, it was explained with a straight face, really fall on the seller, not the buyer (try this out next time you go to the store), and since the seller was the government, there is no point in the government paying the sales tax to itself. Neat. No wonder the Citigroup board just elected Rubin to be its chair.
So here is your global free enterprise system (a k a socialism for the rich) at work: Citigroup/Banamex, which is Too Big to Fail in the United States, has also been deemed Too Big to Fail by the Mexican government and is being subsidized by Mexican taxpayers to buy Aeroméxico, also Too Big to Fail.
The World Bank, IMF and other neoliberal hangouts are still pushing developing countries to open up their financial markets to multinational banks, precisely on the grounds that it will eliminate crony capitalism. ....
http://www.thenation.com/article/citis-mexican-cronies/