Tim Johnson McClatchy Newspapers The Casino Vallarta in Puerto Vallarta, Mexico, was closed in November for safety violations but reopened about a half-hour later under orders by the city's public security chief.

Casino shows gaming's clout in Mexico

Published: Sunday, Feb. 17, 2013 - 12:00 am | Page 14A
Last Modified: Sunday, Feb. 17, 2013 - 8:40 am

PUERTO VALLARTA, Mexico – When municipal inspectors slapped 13 seals on doors leading into the Casino Vallarta one afternoon a few months ago, they had good reason to shut the gaming house down.

The sprawling casino lacked fire extinguishers, smoke detectors and signs indicating emergency exits. It also hadn't provided authorities with proof that its carpeting contained a fire retardant.

What happened in the minutes after the seals went on the doors at 3:41 p.m. on Nov. 14, 2012, hints not only at the disorderly state of Mexico's gaming industry, but also at the power wielded by former senior officials in the Interior Secretariat who left their jobs to become casino brokers and operators. Even basic requirements to keep the Mexican citizenry – and U.S. tourists – safe couldn't withstand them.

It also sheds new light on the influence the gaming industry had in the administration of President Felipe Calderón, whose administration issued 94 new gaming permits in the final hours before Calderón's term ended Dec. 1 – despite Calderón's pledge that no new permits would be issued until regulations were in place to govern the chaotic gaming industry. The three former senior officials linked to the casino all reported to a close associate of Calderón who once ran for the governorship of Jalisco state, where Puerto Vallarta is located, on behalf of the National Action Party, Calderón's political party.

Calderón is now a fellow at Harvard University's Kennedy School of Government.

The seals on the Casino Vallarta doors lasted half an hour before the city's public security chief, Silvestre Chavez, ordered the casino reopened. Three months later, no new inspection has been conducted, and Chavez, a retired army colonel, seems to be in no hurry to order one.

He said he'd joined friends for a soft drink inside the Casino Vallarta about three weeks ago and gave a look around. "I didn't observe any dangerous situation, or any situation that required emergency action," he said.

The Casino Vallarta draws a steady crowd, including many Americans and Canadians. Cruise ships dock throughout the year, coming to a wharf right in front of the casino.

Former senior officials of the Interior Secretariat, Mexico's most powerful Cabinet-level ministry, are behind the casino operator, Producciones Moviles S.A., the former wife of one of the officials, Talia Vazquez Alatorre, has told McClatchy Newspapers.

The company was the primary beneficiary of the Dec. 1 giveaway of new permits, winning in the final hours of the Calderón administration permits to establish 80 gaming halls and sports betting parlors in Mexico.

Among the onetime officials linked to Producciones Moviles S.A. are Juan Ivan Pena Neder, a former senior coordinator to the Interior Secretariat's deputy secretary; Roberto Correo Mendez, who was chief of the gaming and lotteries bureau; and Guillermo Santillan, a onetime Interior Secretariat liaison to Mexico's 31 states, Vazquez said.

All three men reported to Abraham Gonzalez, a deputy interior secretary close to Calderón.

Vazquez is at the heart of an unfolding scandal that is centered in the gaming and lotteries bureau of the Interior Secretariat. A corporate lawyer who was once married to a senior Interior Secretariat official, Vazquez has alleged that she witnessed Calderón's personal secretary, Roberto Gil Zuarth, accept a backpack with $800,000 to help smooth over opposition to opening a casino in Queretaro, a prosperous city north of Mexico City. Gil Zuarth denied the allegation.

Some Mexicans involved in the gaming industry say the use of straw or front men is common in seeking operating permits for casinos and that former Calderón officials from the Interior Secretariat were avid in trying to cash in on their influence.

One lawyer who works with casino operators said onetime officials commonly sought to intervene in disputes with the gaming and lotteries bureau.

"One of them would arrive at a meeting with one of my clients and he would offer to 'solve' his casino problems with Interior by providing an 'oficio' (official document)," the lawyer said, asking to remain anonymous because he still deals with the gaming and lotteries bureau. In exchange, corrupt former officials would demand "facility payments," or even a portion of net earnings at the casino.

Those who dare to probe into casino affairs sometimes get strong-armed.

One of them, Doraliz Terron, a reporter for Milenio Pacifico, part of Grupo Milenio, a newspaper and television conglomerate, had a run-in with Casino Vallarta the morning it was shut down. Terron, 32, said she'd heard that inspectors were to raid the facility, based on an inspection from June that turned up the violations. She went to the casino to seek an interview.

According to a criminal complaint she later filed, after interviewing a casino employee, the gaming venue's administrative head, Cynthia Lamas, arrived with two security guards who manhandled Terron and held her for an hour against her will. They allegedly demanded that she erase photos and a taped interview.

"They threatened me. They told me I'd be sorry, that I didn't know whom I was messing with," Terron said.

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