Mexico's Ruling Party Hurt By Fund-Raising `Blunder'

MEXICO'S Institutional Revolutionary Party (PRI) celebrated its 64th anniversary at the government's helm on March 5. But few of the party faithful were able to savor the moment. The PRI is reeling from bad publicity about a Feb. 23 fund-raising dinner held for business moguls.

The local media adds daily to the details of a private gathering where 30 of Mexico's wealthiest businessmen pledged an average $25 million each to support the 1994 PRI election campaigns.

The dinner was attended by President Carlos Salinas de Gortari and PRI party chairman Genaro Borrego Estrada. Television baron Emilio Azcarrago - described by Forbes magazine as the richest man in Latin America - reportedly promised to give the PRI $70 million in gratitude for his prosperity during the Salinas years.

The PRI has long been criticized for being too financially dependent on the government. But dinner host Antonio Ortiz Mena told reporters it was part of a move "to cut the umbilical cord" between the PRI and the government.

Political analysts say the PRI has blundered.

"A steak dinner for fat cats to fill a campaign war chest won't play well at the grass roots and won't strengthen the move toward decentralization of the party," says George Grayson, a Mexico specialist at William and Mary College in Williamsburg, Va.

Raising party funds from business groups is nothing new. But this latest method is causing a stir.

A critic within the PRI, Mexico City Rep. Demetrio Sodi de la Tijera, says his party is "prostituting" itself to "a privileged group."

Alfonso Zarate Flores, director of Grupo Consultor Interdisciplinario, a private political consulting firm, agrees the dinner was a "political error."

"Form is everything in Mexican society. It was inappropriate for the president of the republic to be soliciting funds," Mr. Zarate says. It appears the donations are in payment for favors received or favors to come, he notes. Or as many are saying here, "El que paga manda" - "He who pays gives the orders."

PRI officials object to such characterizations.

"We only accept donations from loyal sympathizers and without conditions," PRI chairman Borrego told 2,000 party members at the anniversary gathering. "In no case will there be a direct link between the donors and those who use the resources provided from the campaign fund. Individual and organization contributions go to the general patrimony and not to support specific candidates, as in other countries,." PRI chairman Borrego told 2,000 party members at the anniversary gathering.

The PRI has been attempting to diversify its funding sources. The Salinas administration started a PRI lottery, which is expected to generate about $30 million. In February, a PRI Visa credit card was introduced, which party officials hope will pull in about $40 million annually. It is rumored the party may invest in the Mexican stock market. PRI officials also say they intend to hold more fund-raising dinners.

But opposition parties are putting up a fuss. The National Action Party (PAN), the leading conservative opposition party with strong links to the business community, last week abandoned its support for electoral reforms until President Salinas takes steps to limit campaign financing.

In his State of the Nation address in November, Salinas proposed that limits be set on election expenditures and that there be greater disclosure of campaign financing. Given the current political storm, it is likely such limits will be proposed and debated when the Mexican congress meets in April.

Mr. Grayson describes open fund-raising with Mexican multimillionares as indicative of the PRI's improving relationship with the business community under Salinas.

"In the past, some of the policies of PRI presidents have been greeted by business leaders with all the enthusiasm of fingernails scraping a blackboard," he says.

But, Grayson adds, "Neither the PRI nor its constituent organizations have ever developed a grass-roots base of financial support." Most Mexican labor unions derive their financial support from the government, and only a small percentage of union members pay dues, he observes."The influence is from the top down because that's how the money flows."