I. The Land Dispute
Published Dec. 27, 2007
Until recently, it seemed only the dogs of Lomas del Poleo were free. Each day, the little mutts made their rounds, trotting past destroyed pallet homes, the stacked tires that once served as fences, and the scrap lumber that shored up pens for pigs, goats and chickens. When the dogs started showing up dead –poisoned, residents alleged — the spirit of resistance that has characterized this small agrarian community began to die a little, too.
Residents of Lomas del Poleo, which sits on the U.S.-Mexico international boundary line and is roughly five miles west of El Paso, have been living in a veritable concentration camp. A sturdy barbed wire fence anchored by white cement posts surrounds the settlement. Three watchtowers have been erected. And guards are stationed at one of the only gates leading to and from the community.
Farm animals have been killed. A resident was beaten to death. Two children died in a mysterious fire. Periodically, the guards rumble out from their base camp on bulldozers to knock down another house. The homes made of cinder block and cement take time to destroy. But the little casas de paletas are so light and flimsy that they collapse like a deck of cards. A Catholic chapel, made of the same wood pallets, was destroyed in about three minutes. Three days later, with the help of Bill Morton, a missionary priest who now lives in El Paso, the chapel was raised up again.
At first, the residents didn’t understand what was happening. Many had lived undisturbed on the mesa since the seventies. Their children attended a kindergarten and an elementary school located on the mesa and approved by the federal government. The Lomas del Poleo addresses were on their voting cards and utility bills. Then the residents learned that Pedro and Jorge Zaragoza Fuentes, members of one of Juárez’s most influential families, were claiming in court documents that the land belonged to them.
Subsequently, the settlers discovered that Lomas del Poleo was in the bull’s eye of a proposed international border crossing that will undoubtedly make the land on top the mesa extremely valuable. According to interviews and a review of thousands of pages of documents, the crossing is actually just one component of several massive development projects being planned for El Paso, Juárez, and the sparsely inhabited desert that stretches west from these two border cities to the New Mexico state line and beyond.
“We have 37 years of working this land peacefully,” says Luis Urbina, 90, one of the founders of Lomas del Poleo. “ Now everybody wants to be the owner. They are coming out from the bottoms of stones.”
Pedro Zaragoza Fuentes, a 63-year-old businessman who owns a large dairy and other enterprises, has a completely different view of the land dispute. He says his father bought the Lomas del Poleo land more than four decades ago and that his family has been trying to keep illegal settlers off the property ever since. The fence, he explains, was erected to keep “newcomers” out.
Zaragoza contends that the settler’s death was sparked by an altercation involving drunken homesteaders and that the fire in which two children were killed was ignited by an untended stove. Many of the Lomas residents, he alleges, are actually land speculators. “A lot of the houses that are still there, the owners live in El Paso.”
Soaring out over the international line, Lomas del Poleo offers panoramic views of two cities, three states, and two countries. Below, the Rio Grande slithers into Texas from New Mexico, its muddy water thickened by pesticides and fertilizers. Toy-sized cars hurtle along Interstate 10. A couple of hundred yards down the hill is Sunland Park, New Mexico, hardly larger than a village and yet already home to a casino, racetrack and amusement park. El Paso and Juárez, which are approximately five to eight miles to the east and southeast, take up the rest of the view. The two cities are functional outposts dedicated to the manufacture and movement of goods, beautiful only at night when the neon lights of barbecue huts, beer joints, and taco stands blink on, and they resemble galaxies colliding.
Lomas del Poleo is both physically and metaphorically in the center of this huge development zone, which has been referred to as the new “Panamericano” or the “Unión Americana” by businessmen and politicians. “The whole world has become globalized and this particular region has become an inherent part of globalization,” explains Javier Ortiz, a binational consultant.
Wealthy businessmen from the United States and Mexico have staked out their own separate developments. But they are united by their economic interests and political requirements, which involve diplomatic exchanges at the highest levels, as well as the coordination of a bewildering array of governmental entities in two countries.
Although these developments are still in the infancy stages, much of the groundwork has already been laid: Thousands of acres have been purchased. Water supplies have been located and acquired. Bridges reinforced. New highways built. Future rail lines plotted out.
“The border is clearly defined for everyone but this little group of the super-powerful. For them, it is a unified empire,” says Carlos Avitia, a Mexican lawyer who waged a legal effort to help the settlers keep their land and recently was relieved of his duties. “It’s an alliance of unimaginable proportions.”
This borderless new world is being forged at a time when the drumbeat to close the border has grown louder. The ubiquitous presence of the green-and-white U.S. Border Patrol vehicles and National Guard Humvees make the border appear impregnable. The fact is, the border is actually becoming more porous for wealthy businessmen and multinational companies, a reality that Mexico’s president, Felipe Calderón, alluded to in late September at the Border Governors Conference in Sonora when he said he was committed to the construction of even more border crossings for “people, vehicles and rail cargo.”
The Sunland Park crossing, which will be restricted to cars and pedestrians only, will no doubt relieve some of the traffic on El Paso’s international bridges, where the waiting time these days can often exceed two hours. The crossing already has the blessing of local and state officials in both countries, including New Mexico Gov. Bill Richardson, a presidential candidate, former cabinet secretary, ambassador, congressman, and three-time nominee for the Nobel Peace Prize. The Sunland Park Racetrack & Casino has promised to pony up to nearly $12 million for infrastructure for the crossing, records show. And Ruben Segura, the mayor of Sunland Park, said that if all goes according to plan, the crossing could open in two years.
Mexican maps, obtained from the city of Sunland Park under a public records request, indicate that industrial parks, strip malls and housing subdivisions are planned for Lomas del Poleo and the surrounding areas. Numerous roads will also be built, including a six-lane highway that will zoom north across the mesa and run down toward Sunland Park, says Arcadio Serrano, the former head of public works for Ciudad Juárez. Mexican authorities may eventually construct or extend three, east-west roads, which will eventually go from downtown Juárez, pass through western settlements like Lomas, and connect with the Santa Teresa Port of Entry, an under-utilized commercial crossing just over the state line in New Mexico and 13 miles west of downtown El Paso.
Santa Teresa is the turf of El Paso real estate mogul Bill Sanders. In 2003, Sanders formed Verde Group and purchased more than 20,000 acres of land in Santa Teresa. At the same time that Verde acquired the Santa Teresa land, the real estate firm also obtained a permit to pump billons of gallons of water from the ground, a feat that is virtually unheard of in the lower Rio Grande basin, where all the water is already spoken for. The public was not notified –a legal requirement that often leads to protests and years of litigation – because state officials in New Mexico decided an advertisement published nearly a decade earlier was sufficient.
Eloy Vallina Lagüera, who sits on the Verde board, owns about 49,000 acres directly across the line in San Jerónimo, Mexico, and is planning to create a community that will mirror Santa Teresa. The two communities will be linked by roads, a rail crossing, and a contiguous foreign trade zone, which, among other things, will allow firms to import components duty-free into territory that’s neither the United States nor Mexico, warehouse or assemble the items, and then re-export the finished products to foreign countries without having to pay tariffs.
San Jerónimo sits atop the Conejos Médanos aquifer. With water quality and quantity declining in the Hueco Bolson, an aquifer used by both Juárez and El Paso, Juárez officials are hoping one day to tap the Conejos Médanos (which means rabbit dunes in Spanish). Mexican activists and urban planners vehemently oppose plans to develop San Jerónimo because they say the development would rob Juárez of valuable resources, which is growing so rapidly that it cannot meet the needs of its current residents.
Eloy Vallina has shrugged off the criticism, alleging his opponents are suffering from “envidia enfermiza” – a sickly envy. A confidant of Mexican presidents and governors, Vallina is a member of another of Mexico’s super-rich families with businesses on both sides of the border. He was formerly a banker and once headed a firm that specialized in establishing and overseeing maquiladoras for foreign companies. After his bank was nationalized in 1982, Vallina famously said, “Me quitaron el banco. Pues yo les quitaré Chihuahua. They took my bank from me, so I shall take Chihuahua from them.”
Chihuahua also happens to be the birthplace of the Mexican Revolution, which began as an agrarian revolt almost a hundred years ago. “My dream,” says lawyer Carlos Avitia, “ is to distribute these lands to the rightful inheritors, the inheritors of the Revolution. These lands are part of the social heritage of the millions of souls who gave their lives to change this country.”
Although the clamor of pigs and goats and chickens has vanished from the morning air, the residents of Lomas del Poleo are planting vegetables, which are putting on deep green leaves and growing toward the sky. “Nosotros les estamos haciendo el calor a la tierra. We are giving warmth to this land,” says settler Martín Mendoza.
Luis Urbina pounds a hard, calloused fist on his kitchen table when he talks about the indignities that the settlers have encountered in the past few years. A former policeman, Urbina says he founded the community called Granjas de Lomas del Poleo in 1970 – decades before Juárez became synonymous with drug cartels, femicides, and maquiladoras.
The way Urbina tells it, he simply asked the federal agrarian department if he could open a farming community at Lomas del Poleo. Officials thought he was crazy because there were no utilities or streets on top of the mesa but nevertheless gave him the authority to proceed. Urbina began distributing lots averaging two hectares in size to homesteaders. (A hectare is equal to about two and a half acres.) Urbina said he didn’t take a penny from the settlers; he simply showed them a map and told them to choose the lot they wanted. At its peak, about 300 to 350 families lived in Lomas del Poleo. “Only lately, within ten years, this Mr. Zaragoza appears and this Armageddon begins,” says Urbina.
Pedro Zaragoza Fuentes, an extremely private man, lives in a compound on the east side of Juárez. He owns two private jets and travels with bodyguards because he says kidnappings have become an “industry” in Mexico that threaten both wealthy and middle class citizens alike.
Zaragoza heads a business conglomerate called Grupo Agroindustrial Zaragoza, an umbrella organization consisting of more than 30 different enterprises that employ 8,000 workers. The core business is a dairy, founded by his father more than six decades ago, which distributes milk and other products throughout Mexico. The elder Zaragoza milked cows in California for eight years, saved money, and returned to Juárez to start the dairy.
Another branch of the family, which shares the same last name, owns propane gas companies that have operations extending to South America and Europe. Both branches have been dogged by allegations of money laundering, drug smuggling, and tax evasion. A witness testifying before the U.S. House of Representatives in 1997 linked the Zaragoza Fuentes family to Mexico’s legendary drug cartel leader, Amado Carrillo Fuentes. Now believed to be deceased, Carrillo Fuentes was once called El Señor de los Cielos because he sent so many planeloads of dope to the U.S.
Pedro Zaragoza says the allegations against him were drummed up by former Mexico president Carlos Salinas de Gortari, a Harvard graduate who served as president from 1988 to 1994, and whose own name has been linked to the drug trade. “He was a very corrupted man. How do you say it? A malvado.”
Much of the recent publicity Zaragoza’s been receiving involves his role in the Lomas del Poleo dispute. He agreed to an interview (but no photographs) after his son Googled his name and found dozens of negative articles. “You go to the Internet and you will read a lot of bad things about me,” says Zaragoza.
Zaragoza said his father, Pedro Zaragoza Vizcarra, purchased 2,000 hectares of Lomas del Poleo in 1963. Five years later, he sold off 1,000 acres to a woman named Sara Lugo Salas. Not long after that, Mexicans from southern part of the country began to encroach upon the property under the leadership of a retired Army captain named David Alatorre Trejo, says Zaragoza. “We call them parachuters,” he adds.
Sensing the potential for trouble, the elder Zaragoza gave 200 hectares to Trejo with instructions to keep the homesteaders within that area. “So, what this good gentleman did, he kept the land for himself. He did not allow anyone on it and he sold it in 1980,” says Zaragoza. “So the new settlers started getting in. They took five acres each. They fenced it and said, ‘This land is mine.’”
Zaragoza says the family tried to enlist the aid of politicians to help them remove the homesteaders, but the politicians were loathe to get involved because they were fearful of losing votes. “So what we did is go through the legal system,” he says.
Attorney Carlos Avitia, who is representing the settlers, and numerous others familiar with the case, have a starkly different view of the land dispute. They say that Lomas del Poleo is actually part of a huge tract of land south of the international boundary line that belongs to the Mexican nation. Dating back to the last century, dozens of land sales have taken place in this area. Many of the transactions have been fraudulent, with the sellers often selling land that didn’t belong to them or selling more land than they actually owned. Compounding the confusion is the lack of accurate surveys.
The 2,000 acres that Pedro Zaragoza’s father purchased were sold to him by a man who didn’t actually own the land, says Avitia. “The Zaragozas have a title, but it’s a false one,” he adds. Despite the questionable title, Avitia says the patriarch was given an opportunity to protest when 25,000 acres of this vast swath of land was declared in 1975 to belong to the nation. But he never did. “These were rocky lands, originally ejidos full of stones. No one was interested in a single meter of land,” he adds.
That was fine with the settlers, who knew how beautiful the mesa could be, especially at dusk when the mountains resembled blue clouds piling up on the horizon and the slanting light turned even the lowly tumbleweeds into abstract, beautiful shapes. At night, though, when the animals slept, the settlers heard heavy trucks rumbling along the international line and the whine of airplanes.
Journalists referred to the Lomas del Poleo area as a “narco ranch” and reported that a landing strip used by members of the Juarez cartel once existed nearby. The homesteaders and other witnesses also reported seeing caravans of luxury cars speeding across the mesa. In the mid to late nineties, the bodies of eight young women were found among the sand dunes, victims of a horrendous wave of violence that has claimed the lives of more than 400 women in Juárez since 1993. (Today eight pink crosses stuck in the sand near the entrance to Lomas del Poleohhhhh serve as a somber reminder of the murder victims.)
In 2002, rumors began to circulate that the Mexican Federal Electric Commission, which had just recently installed the electricity on the mesa, was going to pull the plug. As it turns out, a district court judge had approved the removal of electricity at the request of Maria del Refugio Fuentes, the mother of Pedro and Jorge Zaragoza Fuentes.
None of the settlers attended the hearing, says lawyer Carlos Avitia. “The Zaragozas claimed that there were no parties who would be harmed by this injunction. And the judicial powers accepted this twisted argument.”
The ruling wasn’t surprising; Pedro and Jorge Zaragoza have many political allies, including Juárez mayor Héctor “Teto” Murguía, who has just finished up his three-year term. (“Pedro Zaragoza is a very successful businessman and a good friend of mine,” says Murguía.)
When the trucks from the electric company arrived, in mid-September of 2002, the residents were waiting with sticks and stones. They formed a human barrier at the entrance to Lomas and set fire to several tires to block the vehicles. The electric company employees hadn’t counted on the fierce opposition and left, saying they wouldn’t be back without a police escort.
For the next few months, everything was peaceful. Then, in May of 2003, the electric company returned with 70 policemen. The workers took down 78 electric poles, 14 transformers, and rolled up nearly five miles of wiring. Not long after that, a group of about 150 young thugs – a grupo de choque — appeared on top of the mesa. They posed for the cameras, guns tucked into their belts, and several wore black t-shirts that featured pictures of fanged beasts.
According to reports in the Mexican newspapers, the guards told reporters that they were being paid $30 a day to hacer bola – join the rabble — and $200 for each home they demolished. Numerous eyewitnesses have reported seeing the guards armed with pistols, rifles and even machine guns. “This is one of the most unbearable aspects that the people here have suffered from,” says Carlos Avitia. “ How is it possible that they are carrying these weapons? We call the police and they do nothing.” (Asked twice about the weapons, Pedro Zaragoza insists the guards aren’t armed. “They’re not allowed to carry guns,” he says. “If they had guns, they would be in jail in the next hour.”)
The truck drivers accompanying the guards covered the sides of their doors with paper in order to hide the company logos. But Alex Sanchez, a former photographer for El Diario, a newspaper in Juárez, says the paper on one of the trucks fell off, revealing the name, ‘PEJORZA,’ which is one of the businesses owned by Pedro and Jorge Zaragoza.
The vigilantes remained on the mesa for about three weeks. Then an activist suggested the settlers march on City Hall. Mayor Jesús Alfredo Delgado, who was nearing the end of his term, promised to make the thugs leave. He kept his word, sending police to disperse the private guards.
The following spring, in March of 2004, the guards returned with heavy equipment and construction material. They built an elaborate compound, which included portable toilets, a generator, food supplies. In the middle of the night, they constructed the barbed-wire fence.
The homesteaders attempted to pull the fence down on several occasions, but finally gave up. Since then, the fence has been extended down the hill to the international boundary line and has enclosed several more communities in the impoverished colonia of Anapra, which is just on the other side of the international boundary line from Sunland Park.
As the months passed, residents say the guards continued to threaten them, often at gunpoint. When the settlers sought a written document from authorities promising that they would stop the aggression, an official told them he would provide such an agreement only “if they cut off his balls.”
Manuel Balderas, a fortyish, plump, bespectacled lawyer who worked for the Zaragozas, was in charge of deciding what homes were to be destroyed, according to interviews with settlers and written accounts. Before knocking them down, though, Balderas tried to intimidate or cajole the neighbors into selling their plots. “How much do you want for your piece of trash?” he asked the homesteaders.
Erasa Mendoza, a petite woman who settled in Lomas 22 years ago with her husband, Martín, says she grew furious each time she saw Balderas. “He came here asking me to sign some papers, to give him permission to knock down my home. I let him have it. I cussed him out.”
“You don’t want to sign voluntarily—por la buena? Just don’t say anything if you end up in the back of a car trunk,” Erasa quoted Balderas as saying.
Without electricity, living grew hard on Lomas del Poleo. There were no fans to stir the breeze in the summer, no heaters to ward off the desert’s penetrating cold. The residents huddled around small fires, bulked up with multiple layers of clothing, and began the process of getting bootlegged electricity by running black wires to power sources below the mesa.
The roar of bulldozers could be heard all day long. The guards knocked down not only the flimsy pallet homes, but homes of brick and cinderblock. Sometimes, as many as five houses were knocked down in a day. Then the debris was carted off and the ground smoothed to make it appear that no one had ever lived there. “For days, bulldozers and backhoes went about demolishing homes, and then loading the debris onto a fleet of large dump trucks. This strategy was effective in instilling fear in people and forcing them to seriously analyze their chances of being able to stay in their homes on the mesa,” wrote Father Bill Morton, a member of the Missionary Society of St. Columban, who lived on the mesa for a time and wrote frequently of the land dispute in the missionary’s newsletter.
One day, Juana Morales, who had nine children and worked in a maquiladora, accompanied her dying son to the hospital. The day after his funeral, she returned home to find her house had been destroyed. “There was nothing left – nadia,” she says. When she started to rebuild, “They told me, ‘Either you take this house down or we’re going to llevarte al bote – take you to the slammer.”
Morales, who is a widow and lives alone, says every penny she earned went into buying building materials for her home. “I never went to school. By pure chance, I was able to get a job at a maquiladora. I can’t even read,” she says. “ It has been a great sacrifice for me to save up and buy materials to build my home. Then they come and knock it down and dump it into their trucks.”
The people on the mesa appealed to Vicente Fox, then president of Mexico; to the governor of Chihuahua; and to politicians in the United States, including New Mexico Gov. Bill Richardson, letters obtained from Richardson’s office under a public records request show.
A registered nurse named C. Christine Backlund wrote Richardson that she “was scared out of her wits” during a 2004 visit to the mesa. Upon entering the guard compound, a man came out to answer questions. He told the nurse and her fellow visitors, “This entire operation is bankrolled by the Zaragoza family. All the men, including myself, are on the Zaragoza payroll. You see, these squatter people, they know this land will soon become quite valuable when the new border port of entry is established. That is why they put up their shacks. But really, they do not even live here … these are their ‘vacation homes.’
“Most Honorable Bill Richardson– Please believe me when I say, that no one in the world could possibly consider these cardboard shanties their ‘vacation homes.’ These are truly the only homes they have, and under Mexican Constitution and the state laws of Chihuahua, have legal land rights to the possession of their homes.”
On the morning of Aug. 17, 2005, a youth named Jose “Pepe” Alberto Hernandez stopped to talk to Manuel Balderas, the Zaragoza attorney. Pepe, who was born and raised in Lomas del Poleo, didn’t approve of what Balderas was doing, but enjoyed talking to the lawyer because he thought he had charisma.
“Why are you doing this?” he asked Balderas. “For a few pesos you’re destroying a lot of people’s lives. God is going to punish you.”
“By the time your God gets to me,” responded Balderas, “I will already have done a lot of harm.”
At some point after this conversation, Balderas caught up with a crew who was demolishing another house. A settler named Luis Alberto Guerrero, a bus driver and father of three children, drove by the site with his brother.
“Dejenos en paz! Leave us in peace!” he screamed to Balderas and his guards.
A verbal argument ensued. Then Manuel Balderas shouted, “Denles en la madre! Let the motherfuckers have it!”
The guards dragged Luis out of his vehicle and began to beat him with pipes, shovels and pick axes. “It was a blur,” says Pepe, who witnessed the entire event.
Pepe and another settler named Jesus “Chuy” Uribe had sped to the scene in separate vehicle when they heard the ruckus. When the guards saw them, he says, they pulled out pistols and began firing at them.
Pepe leapt from the car and made a dash for a small hill. Jesus jumped out, too, but not before he retrieved his own gun out of the glove box and returned the fire. Although he took two bullets in the leg, he succeeded in hitting three men.
One guard was shot in the knee. Another was hit in the chin. And Manuel Balderas was struck twice – once in the stomach and once in the chest. “He had on a white shirt and he had blood on his back,” recalls Pepe. “He was also throwing up blood from his mouth.”
When the guards saw that Balderas had been severely wounded, they picked up the lawyer and threw him in Jesus’s car, which had been sprayed with bullets, and sped off. The remaining guards pulled their wounded companions onto a dump truck and followed. One man fell out of the truck and was run over by the vehicle. The guards stopped, picked him up, and threw him into the back of the truck and kept on going.
In the shocked silence that followed, Pepe and the other settlers crept out of their hiding places. Luis Guerrero lay unconscious in a pool of blood. He was rushed to the hospital. Thirty-six hours later, he was dead.
Eventually the other individuals wounded in the gun battle showed up at local hospitals for treatment. But Manuel Balderas, who appeared to be the most severely injured of all, seemed to have vanished.
Zaragoza’s version of events is startling different from eyewitness accounts and published reports. Zaragoza says several settlers were arguing with Manuel Balderas, whom he confirmed was one of his representatives and is still alive. “ I think there were three of them. They were drunk. Balderas was trying to convince them not to go into the property. They started pushing. One of these guys who was drunk pulled a gun and shot him in the leg.”
Despite the rising violence, Mayor Murguía refused to intervene. “We met with many of the leaders and asked for calm, but we are not judges. The judges are the ones that decide the legal conditions of those plots,” Murguía told El Diario.
A couple of weeks after the shooting, on Sept. 28, 2005, Carmen Casango, kissed Magdeleno, her four-year-old son, goodbye. “I’m leaving now papacito,” she said, telling the boy to keep an eye on his three-year-old sister, Maria, while she walked her eldest child to school. The school was only 700 meters away. As soon as she dropped the child off, she turned around and saw smoke coming from the direction of her house. By the time she got home, the house was ash and her two children were dead.
Carmen broke down completely. Her husband, who worked at a maquiladora, was excused from work and came home. “Que desgracia. I don’t even have a picture of my children. Everything burned, everything is there,” he told reporters.
“It burned really fast,” says Martín Mendoza, who climbed up on his roof and saw the house engulfed in flames. Although fire officials said faulty wiring caused the blaze, the neighbors say the house did not have electricity. They also saw a couple of strange men pouring something around the house prior to the blaze.
“There was no possibility of a short circuit,” adds attorney Carlos Avitia. “The witnesses who were there say the fire burst forth simultaneously at all four sides.”
Zaragoza says his employees had nothing to do with the fire. “It’s just not true. And the worse thing is that it’s on the Internet,” he says. “What we know is the mother of those children went to take a son or a daughter to school. She left the stove on. The house caught fire and those children died.”
The horrific publicity led Pedro Zaragoza to place an advertisement in El Diario. He alleged that he and his brother were the victims in the land dispute and that the settlers were trying to evict them from their rightful land. “Our property has suffered various invasions that have been carried out by a group of opportunistic persons who pretend to protect low-income people, but do it for materialistic purposes. These people of ‘good conscience’ are nothing more than professional thieves.”
Zaragoza dismissed the argument that Lomas del Poleo was an established community recognized by the government. “The fact that the colonos have schools, day care centers, named streets and registered addresses is merely a humanitarian act on the part of the government.”
Murguía finally did become involved in the dispute when the Zaragoza brothers appealed to him for help. “What I did is take out all the bullshit and try to solve the problem,” Murguía says.
The mayor assigned Carlos Morales, director of the Asentamientos Humanos, to mediate the dispute. Morales, a tall man who wears crisp shirts, is clearly on the side of the Zaragozas. He, too, believes the settlers are “land speculators” and says the barbed wire has been erected only because the Zaragozas are trying to protect their property. The private guards, he adds, are on the mesa to help build relocation houses and protect the settlers. “This is an area where narco trafficking happens. Lots of outsiders are involved in these things. The guards are there to protect the inhabitants from criminals.”
Zaragoza says he donated 10 hectares, or 25 acres, to the settlers and has built 56 small houses and a grammar school for anyone willing to move. Sixty-two families have moved to the new location, Morales says, and only 17 families remain on the mesa. “There’s going to come a point where they will have no choice but to accept the judicial triumph of the Zaragoza family,” Morales says. “And if they refuse they are only harming themselves. The federal government will pass a verdict to forcibly remove these families, which they can already do.”
Carlos Avitia says that actually more than 100 families are involved in the litigation to obtain the land. “You have people who are not satisfied with what they have but want that of their neighbor. That’s why I call these caciques we’re fighting against – the Zaragozas, the Vallinas – poor rich men. They aren’t happier than the poor. It hurts them for poor people to have an opportunity to walk without them. And if a poor person sees a piece of land he wants, they strip it away.”
Avitia’s eloquent defense of the settlers has attracted enemies. One evening, when he was giving a settler a ride home, he says a man approached him and struck him in the head. The force of the blow knocked him to the ground and left him with a nasty gash above his eyebrow. “It was all very strange,” says Avitia
At night, sitting in the parking lot of El Paso’s Sunland Park Mall, shoppers can look south into Mexico and see Lomas del Poleo, shaped like a long ship, stalled in the velvet darkness. A few lights are visible, including one that appears to be only yards from the house where the two children burned to death. Although state and local officials in Texas and New Mexico have been informed of the violence occurring on the mesa, the information doesn’t seem to have dampened the enthusiasm for the new crossing.
Ruben Segura, the mayor of Sunland Park, told a reporter from El Norte that negotiations with Mexicans were at a very advanced stage. He predicted construction of the crossing could begin sometime this year. “We are just waiting for the state level to catch up to the studies; we are ready to proceed.” (In an interview, Segura was more circumspect, saying it could be two years or more before the actual crossing opened.)
Segura, who’s 39 years old and has served as mayor of Sunland Park for the past 12 years, has a financially powerful ally that may move the deal along more quickly. Harold Payne, the general manager of Sunland Park Racetrack & Casino, in a March 10, 2006 letter to the city of Sunland Park, pledged to contribute nearly $12 million over a three-year period. “The idea of the border crossing for Sunland Park is not only good, it is great,” he wrote. “Now let’s not mess around, let’s get it done.”
Segura hired Roberto Díaz de Leon, a binational planning consultant who charges $150 an hour, to help with the studies and the presidential permit process. Díaz de Leon said in a recent interview that both countries have a few more things to do before construction on the crossing can actually begin. The United States and Mexico both have to own the land outright for the port of entry — which means the land dispute will have to be solved. They also have to submit a plan to their respective governments on how the port of entry will be financed and maintained.
The Anapra/Sunland Park crossing eventually could process as many as 15,000 to 20,000 vehicles a day. If tolls were set at, say, $2 per car, that would produce millions of dollars in revenues for Sunland Park and attract a lot of additional development. Not surprisingly, a feasibility study prepared for Sunland Park also shows that the crossing initially would generate an additional 50,000 customers per year at the casino.
Sunland Park, which will own and operate the crossing on the U.S. side, will keep the toll revenues, says binational consultant Javier Ortiz. It’s not yet clear who will own and operate the crossing on the Mexican side, he says, adding that it could be an agency of the federal government, the city of Juárez alone or in partnership with a private company, or simply a private company operating under a federal concession.
Gov. Bill Richardson, together with the governor of Chihuahua, in November of 2006 requested a meeting with Secretary of State Condoleezza Rice to present plans for the Sunland Park-Anapra border crossing project and a new international rail crossing near the Santa Teresa/ San Jerónimo port of entry.
Juan Massey, director of New Mexico’s Office of Mexican Affairs and Trade, said in a recent email that meeting did not take place. Instead, officials from Chihuahua and the state of New Mexico, including Chihuahua Gov. José Reyes Baeza and Sunland Park Mayor Ruben Segura met with Undersecretary of State Betsy Whitaker. Richardson was not present. Segura explained the Sunland Park-Anapra crossing to Whitaker “who was attentive and said the State Department would work with New Mexico and Chihuahua once the project reached a stage where their involvement was required,” Massey added.
Bill Hume, the governor’s director of policy and issues, now says Richardson’s top priority is expanding hours and services at the Santa Teresa port of entry. The Governor’s Office, he went on to say, has received indications that the State Department is not enthusiastic about the Anapra/Sunland Park crossing. “I get the impression that we are not going to spend more federal money on new crossings and infrastructure.”
In September 2006, Father Bill Morton, known affectionately by the people of Lomas del Poleo as “Padre Memo,” was forced to leave Mexico. Morton had participated in the numerous protests and letter-writing campaigns initiated by the settlers.
Lucia “Luci” Esquivel, the widow of Luis Alberto Guerrero, who was beaten to death, recently told Morton that she had received a bill from the cemetery where her husband is buried. Although Juárez city officials had promised to pick up the $560 in burial expenses, they did not keep their word, she told the priest. “Now the cemetery wants about $560 or they will exhume her husband, put him in a common grave and sell his plot to someone else,” Morton wrote in a newsletter published by the Society of St. Columban.
Not long ago, a settler named Manuel Garcia returned home to find his house looking like it had been sucked up by a tornado and then slammed down into the earth. Dishes, condiments and other household goods lay strewn about. His kitchen was gone and the bedroom bashed in. Still, there was just enough room for him to crawl into his bed.
Garcia, who suffers from glaucoma and carries a cane, was extremely upset when he saw the wreckage. But he possess a sunny, irrepressible nature and soon began rebuilding. Then the guards returned and knocked down the structure again. So Garcia’s sifting through the wreckage once more, salvaging wood for his walls and tin for his roof. “I’m going to keep on fighting because the tierra belongs to those who work it,” he says, quoting Emiliano Zapata. “We love our homes. We have suffered with them. This is part of our lives and it’s part of an unjust life. The way we make justice for ourselves is by rebuilding.”
Martín Mendoza says he’s also not leaving, even though he suspects the final confrontation is coming soon. “We’re not willing to let them have this land, come what may. If they come by force we’ll respond. We’re committed.”
In the meantime, Mendoza’s tending to his store, working on home improvements, and enjoying the nights, which are filled with stars and far from Juárez. “Here one is happy. Here you are free to go anywhere you want. Here we used to be very happy.”
II. Interview with Pedro Zaragoza
The compound where Pedro Zaragoza lives and works is a cool oasis in the middle of downtown Juárez. The towering walls that enclose the grounds keep out intruders and also the sound of traffic. The grass is green and watered. Life-size bronze sculptures gleam in the morning sun. A fountain bubbles somewhere. Guards carrying walkie-talkies amble along the walkways and a security camera mounted at the outside gate scrutinizes visitors.
Three large homes are arranged in a semi-circle around a driveway. A workman is on a ladder, doing repairs on a house that serves as Zaragoza’s business headquarters. Inside, a discreet, almost churchlike silence reigns, except for the high-tech sounds of computers, faxes and cell phones.
Zaragoza, a lanky man who keeps fit by working out in his own gym, has brownish hair and smooth skin. On the day of the interview, he was casually dressed, wearing a short-sleeve shirt, expensive slacks, and a single gold chain. His employees were more formally clad and treated him with deference. Zaragoza speaks in a slow, deliberate English, content to wait in silence for long awkward minutes while aides rush out to find answers to his questions. Occasionally, sparks of impatience flash through his guarded and polite demeanor.
On the floor, to the right of his desk, is a map of Lomas de Poleo. Although the dispute seems to consume a lot of Zaragoza’s time and energy, the property represents only a sliver of his assets. In addition to the dairy business, Grupo Agroindustrial Zaragoza has a development arm, called Inmobiliaria PEJORZA, which owns more than 40 gasoline stations, several car washes, and 21 strip centers. A transportation arm, Transportadora Agroindustrial PEJORZA, owns a fleet of large trucks and tankers. Zaragoza also owns a pecan farm in New Mexico, two stadiums, and formerly owned a Corona-Anheuser-Busch distributorship, which he says he sold two years ago.
Pedro’s cousins – including Miguel, Eduardo and Tomas — are involved in various propane gas businesses, which go by the names of Grupo Zeta, Grupo Tomza, Biogas and Hidrogas. The most successful is Miguel Zaragoza Fuentes, who heads Grupo Zeta, the fifth largest propane gas business in the world. In 1990, a propane tanker truck said to belong to a company controlled by Miguel Zaragoza Fuentes was stopped at the California border and found to contain nearly four tons of Columbian cocaine. But the incident, which included the mysterious disappearance of the driver, “did not produce results,” a witness testified during a 1997 committee hearing before the U.S. House of Representatives.
Recently, several prominent business publications in Mexico have reported that Miguel Zaragoza Fuentes and Grupo Zeta are being investigated for money laundering. In paid advertisements, including a two-page ad that appeared in a September 23 edition of the Juárez-based newspaper, El Diario, Miguel Zaragoza and Grupo Zeta strongly denied the charges and blamed the allegations on an unnamed competitor.
Zaragoza says he was suspected of being involved in the drug business because his wife’s two sisters were married to two known narcotraficantes named Rafael Aguilar Guajardo and Rafael Muñoz Talavera, both of whom are now believed to be dead. Zaragoza attracted further suspicion when the tanker of cocaine was seized. (“I choose my wife and I choose my friends, but I can’t choose my relatives,” he once told a government official.)
Former Mexican President Carlos Salinas, who has the dubious distinction of accidentally shooting a servant when he was a child, in 1992 sent agents to Juárez to audit Zaragoza’s books. The procedure continued through the spring of 1994. “After two years, they didn’t find anything on my businesses. Then they issued an order in Mexico City to arrest me.”
Twenty federal policemen arrived at his house. His wife allowed them in and they searched the premises looking for Zaragoza. “By then I was already in El Paso because one of the men auditing my books told my director, ‘I don’t know what Mr. Zaragoza did but the order comes from Los Pinos (a reference to the official residence of the Mexican president.) We understood then that they were after me. And I said, ‘Well, I had better leave town.’”
The arrest warrant, he says, accused him of numerous criminal activities, including money laundering and drug smuggling. The smuggling charge stemmed from an incident in which two federal agents claimed to have witnessed Zaragoza and some armed men unloading duffel bags of drugs. The incident was alleged to have occurred in June of 1994 — two months after Zaragoza says he fled to El Paso.
Once in El Paso, Zaragoza says he enlisted the help of lawyers to prove his innocence and get his name cleared. One of his representatives sought a letter from Travis B. Kuykendall, head of the DEA in El Paso. Zaragoza quoted Kuykendall as telling his lawyers, “I know who Mr. Zaragoza is. I investigated him because of his relationship with those relatives. But he’s clean.” Nevertheless, Kuykendall said he wouldn’t write a letter to that effect unless he was ordered to do so by higher-ups in Washington.
A lawyer and pilot for Zaragoza then contacted U.S. Sen. Pete Domenici, a conservative Republican from New Mexico, hoping that the senator could help them get an appointment with DEA officials in Washington. (The pilot, Zaragoza says, had once given Domenici a ride from Santa Teresa to Santa Fe.) “Mr. Domenici told them, ‘Well, first tell me who this Mr. Zaragoza is. If he’s clean, I’ll help him. If he’s not, you’ll have to find another senator.’ Those were his words. I remember,” says Zaragoza.
At that time, Domenici was one of the most influential Republicans on Capitol Hill and wielded enormous political influence. (One of his pet projects happened to be the Santa Teresa Port of Entry and today the highway leading to the port bears his name.)
To prove his innocence, Zaragoza submitted to a polygraph examination. The polygraph examiner, who was based in Dallas, conducted a lengthy interview in which Zaragoza denied any involvement in the drug business. “He stated he has never put money in, invested in or financed any form of drug business or drug operation and stated he has never been involved in the business of drug trafficking or drug smuggling himself,” the examiner wrote in his report. Then the polygraph examiner wired up Zaragoza to see if he was telling the truth.
“Have you ever been involved in the business of drug trafficking yourself?” the examiner asked.
“No,” responded Zaragoza.
“Have you financed or invested in any drug traffic business?”
“Have you ever laundered any drug money?”
“No,” Zaragoza responded.
Zaragoza’s response patterns were “NON-DECEPTIVE,” the examiner later wrote. “It is this examiner’s opinion that he was not deceptive in his answers and, subsequently, that he was being TRUTHFUL.”
The DEA’s Travis B. Kuykendall subsequently wrote a two-paragraph letter, which stated, “There is not currently any active investigation by DEA El Paso of Mr. Zaragoza Fuentes. To the best of our knowledge there does not exist any warrants for Mr. Zaragoza Fuentes’ arrest.”
U.S. Sen. Pete Domenici also wrote a letter to federal officials in Mexico’s Finance Department and the Attorney General’s Office, as well as to the governor of Chihuahua. Pointing out that Zaragoza was a Mexican citizen who had “considerable business activity” in his home state of New Mexico, Domenici wrote, “According to information provided to me, Mr. Zaragoza and his family have been badly treated and suffered abuses by certain elements and officials of the Mexican government. The reason given for this bad treatment, I am told, is that the U.S. Drug Enforcement Administration (DEA) in El Paso, Texas, U.S.A., has provided information to Mexican officials that Mr. Zaragoza is under investigation by the DEA for involvement in illegal drug activities.”
Domenici then pointed out that Zaragoza was not being investigated by the El Paso DEA office and thus there was no “factual basis” for the harassment. “Therefore I respectfully request that this information be used to stop the harassment of Mr. Zaragoza, his family and his business associates.” (Zaragoza provided me with copies of the polygraph examination and the letters from Travis B. Kuykendall and Pete Domenici.)
Salinas left office at the end of 1994. But Zaragoza says he did not return to Juárez on advice of his lawyers until 1996. During that time his daughter got married and his father fell ill with cancer. “When they were putting those wires on me, I couldn’t believe what was happening. That was the kind of president that Salinas was.”
III. Developing the Border
When Bill Sanders, a multi-million-dollar real estate mogul, sold his complex real estate investment and management company to General Electric for $5.4 billion, he could have lived anywhere in the world. Instead he chose to return to his hometown of El Paso, a city often enveloped in a margarine-colored haze and dominated by the Franklin Mountains, which in the noonday glare resemble peaks of dried cement.
A cosmopolitan businessman who has erased all but a faint twang from his West Texas roots, Sanders wasn’t ready to retire, but he was tired of flying around the world on airplanes. So he poked around the border. While other people may have seen crime, decaying infrastructure and poverty, Sanders saw opportunity: Under-valued real estate and a niche manufacturing market that had not yet been fully exploited. “I think El Paso is one of the biggest sleepers I have seen in my entire business career. I think it’s a huge opportunity,” he told the El Paso City Council in 2005.
Sanders concluded the entire border -– from San Diego/Tijuana to Brownsville/Matamoros – was a sleeper. In 2003, he formed Verde Group, Inc. to take advantage of this opportunity. “Whether the country likes it or not, the manufacturing platform in the U.S. is going to be on the Mexican border, and that’s where the growth is going to take place,” Sanders told a magazine published by his alma mater, Cornell University.
The Verde Group, which uses sophisticated research to spot trends, believes that multinational companies, many of which had left North America in search of ever-cheaper labor, were discovering that getting products to U.S. cities was costing more in the post-9-11 world. Some of those businesses would be coming back. When they arrived, Verde would be there to welcome them into a new world that was not quite the United States and not quite Mexico, but a savvy hybrid that that could take advantage of the rules – and lack of rules – in both countries.
Sanders put some heavy hitters on Verde’s board, including Ray L. Hunt, a Dallas billionaire with an estimated net worth of $2.5 billion and former member of the board of directors of Halliburton; Jay O. Light, the dean of the Harvard Business School; H. Laurence Fuller, the former chairman of Amoco, and John P. Frazee Jr., former president of Sprint.
Then Verde went on a buying spree. If the real estate firm’s vision becomes a reality, vast stretches of seemingly empty desert along both sides of the U.S.-Mexico border will some day be replaced with bunker-style warehouses, housing subdivisions, and orderly industrial parks, where dawn and dusk are no longer marked by the flash of jack rabbits but by the fizz of underground sprinklers.
A trim man in his sixties, Sanders cultivates an air of mystique by rarely giving interviews or making public appearances -– except when he wants to make a splashy announcement or needs to shore up investor confidence in his companies. In the spring of 2006, Sanders stepped briefly into the limelight when he and a group of city officials unveiled an ambitious redevelopment plan for downtown El Paso.
Funded with both public and private money, the plan was developed behind closed doors by the Paso del Norte Group (a civic organization that consists of businessmen, developers, and current and former politicians on both sides of the border), and targets an area of downtown El Paso between Interstate 10 and the international border. Under the plan, the heart of El Paso’s Segundo Barrio, which for more than one hundred years has been the “Ellis Island” for Mexicans emigrating to the United States, would be replaced with upscale lofts, condos, shops, a mercado, and possibly even several big box stores. Sanders, who declined to be interviewed for this story, said redevelopment of El Paso would be a “waste of time” -– one of his favorite phrases -– unless it were tied to regional development.
Like the dot.com entrepreneurs, Sanders has managed to create value in his products that actually exceed their net worth by building expectations among investors. “And he is usually the first one to cash in on the additional value he creates,” said one El Paso businessman. Sanders builds complex rings of business entities, nested inside each other like Russian dolls, which give him flexibility, as well as protection from legal and financial liability. Verde is no exception. Records on file with the New Mexico Public Regulation Commission and New Mexico’s Doña Ana County show that roughly 25Verde entities – ranging from Verde Group to Verde Corporate Realty Services to Verde Group Inc. have been created since 2003.
One of Verde Group’s first large purchases was more than 20,000 acres in Santa Teresa, New Mexico, a huge chunk of land located 13 miles west of downtown El Paso and considered by many to be one of city’s outermost suburbs. The property, which measures eight miles in width at the border, actually surrounds the Santa Teresa International Port of Entry.
The purchase proved to be a fortuitous event for Eloy Vallina Laguera, another Verde board member, who initially owned a little more than 49,000 acres on the other side of the border and is planning a mirror development there. Reported to be one of the richest men in Mexico, Vallina has morphed from banker to maquiladora operator and now a developer. After his bank was nationalized in 1982, Proceso, a Mexican publication, quoted Vallina as saying, “Me quitaron el banco. Pues yo les quitaré Chihuahua. They took my bank from me, so I shall take Chihuahua from them.”
Vallina, who declined to be interviewed, is currently chairman of Accel, a Mexican holding company traded on the Mexican stock exchange. In 1990, Accel acquired Elamex, a pioneer in the maquiladora concept. Eventually, Elamex became what’s known as a shelter operator, which meant that it did all the work associated with the maquiladoras, including the hiring of workers, doing the payroll, obtaining permits, paying fees, importing the raw materials and machinery and exporting the finished products.
When Elamex went public on the NASDAQ in 1995, it was ranked the fifth largest maquiladora operator in Mexico. It had 17 manufacturing facilities, eight of which were located in Juárez, according to Hoover’s, a research company that compiles information on businesses. When companies started moving to Asia, Elamex’s profits began to decline. So Elamex sold its shelter operations and purchased other companies, including a candy manufacturer. In 2006, Elamax decided to delist from the NASDAQ, noting the filing requirements had become expensive and burdensome. At that time, it had less than 300 holders of common stock, a document on file with the Securities and Exchange Commission shows.
A confident of Mexican presidents and governors, Vallina purchased the huge parcel of land of San Jerónimo land in 1998 for roughly $5 million, according to Proceso, a respected Mexican publication. In 2004, twelve days before Chihuahua Gov. Patricio Martinez left office, Martinez (whose campaign Vallina helped finance) “expropriated” 212 hectares of Vallina’s land and paid him $4.6 million, the magazine reported. The net result? Vallina only wound up paying about $500,000 for nearly 50,000 acres, or about $10 an acre.
Both the Santa Teresa and San Jerónimo developments, referred to in the Mexican press as mirror cities, will be yoked together by an international railroad crossing and a network of roads, as well as by two foreign trade zones, which will face each other and touch at the border, says Jerry Pacheco, executive director of the International Business Accelerator, a trade counseling center for the state of New Mexico.. The foreign trade zones, essentially territory that technically doesn’t belong to either country, will allow companies to import items duty-free into the United States or Mexico. The products can then be warehoused or assembled. If they are re-exported to a non-NAFTA country, such as Japan, the firms won’t have to pay any tariffs at all since they didn’t technically enter either country. But if the products are exported to the United States or Mexico, the companies will only have to pay tariffs on the value-added portion of the items. “The foreign trade zone within the binational campus would capture the spirit of the maquila industry,” explains Pacheco.
The Mexican government has already approved the foreign trade zone in San Jerónimo, Pacheco says, and the paperwork establishing Santa Teresa as a free trade zone should be complete within the next six months. The two foreign trade zones will be important recruitment tools, he adds. “We’ll be creating a niche between the United States and Mexico where the best elements on either side of the border can be accessed by companies.”
Several huge railroad projects and a proposed international railroad crossing are planned for both Santa Teresa and San Jerónimo. In the U.S., four miles to the west of Santa Teresa, Union Pacific is building a $150 million railroad terminal facility, which someday may process up to 100,000 container cars. Union Pacific has secured $14 million from the feds and is building the railroad facility on Bureau of Land Management Land. The state of New Mexico is kicking in $5 million for a connecting road and has agreed to waive the gross receipt tax and fuel taxes.
On the other side of the border, an even more massive railroad project is taking shape. According to maps, Mexican authorities are planning to build a new railroad bypass that would be about 40 miles long and cost up to $120 million. The bypass, which recently was endorsed by Mexican president Felipe Calderón, would start somewhere south of Juarez, curve north along the inside of Vallina’s property and cross the border two to three miles west of the international port of entry. From there, it would continue north, running west of the Verde acreage, and pass through the Union Pacific facility.
When all the infrastructure is put in place, Santa Teresa and San Jerónimo could one day be thriving communities that rival El Paso and Juárez. That’s exactly what officials from New Mexico want. And that’s exactly what activists and urban planners from Juárez don’t want. “What is happening is that we are experiencing the birth of a city as big as Juárez that will be owned by one guy,” said Mexican journalist Julian Cardona.
Mexican critics argue that San Jerónimo could divert resources from Juárez, which doesn’t even have enough money in the coffers now to pave its streets, maintain the sewer system, build schools and libraries, or hire an adequate number of police and firemen.
Héctor “Teto” Murguía, who concluded his three-year term as mayor of Juárez in early October, says the critics are wrong. “If we develop San Jerónimo, we’ll have another pole of attraction for the city. It’s going to mean a lot of good for the people of San Jerónimo, El Paso and Juárez.”
A portion of San Jerónimo sits atop the Conejos Médanos aquifer. With water quality and quantity declining in the Hueco Bolson, an aquifer used by both Juárez and El Paso, Juárez officials are preparing to tap the Conejos Médanos (which means “rabbit dunes” in Spanish). In fact, according to an article that appeared recently in Frontera Norte Sur, a New Mexico State University Web site, Chihuahua Gov. Jose Reyes Baeza on Nov. 23 announced plans for a new water project, which includes drilling 23 new wells in the Conejos Medanos aquifer and the construction of a pipeline so the water can be transported to neighborhoods in Juárez. Frontera Norte Sur also reported that a company owned by Carlos Slim, the world’s richest man, will invest $100 million in the project and oversee construction, In return, Slim’s company will have a ten-year concession to sell water to the Juárez municipal government.
Other sources said that the pipeline carrying the water will be located two to three miles south of the international line and cross the lands owned by Vallina, the Lomas de Poleo property being claimed by Pedro Zaragoza, and the land of several other wealthy owners. “With the pipeline crossing their properties,” the source said, “it’s not far-fetched to think that they will tap into it to complement their own wells.”
Murguía presided over a stormy meeting in late 2005 in which the San Jerónimo development was approved by the Juárez city council. Although Christmas was only a few days away, the meeting was packed. Carrying red balloons and posters, about 40 or 50 activists, including priests, nuns, and college professors, filed into the meeting room to protest the San Jerónimo plan. An even larger group of PRI members showed up to support the development. “They wanted to pretend it was two citizen groups having a dispute,” said Willivaldo Delgadillo Favela, who attended the meeting and is a member of Consejo Ciudadano Por El Desarrollo Social, or the Citizen Council for Social Development.
When the meeting grew noisy, the city councilors decided to move to a private room to deliberate. As they filed out, Murguía’s supporters began shouting, “Teto! Teto! Teto!” Murguía, a stocky man with fair skin and a nose shaped like a squashed peach, smiled broadly and turned his thumb up. Then, in the style of a Roman emperor, he turned his thumb down and left the room.
A melee broke out immediately. The pro-plan supporters began pushing and shoving the priests and nuns and other activists. “They started kicking us, hitting us, knocking us down. We started running,” said Delgadillo. “ The police were there. They didn’t do anything. They just watched.”
Despite the fierce opposition, the San Jerónimo development was approved. The opponents then mounted a petition drive and gathered 53,000 signatures – well in excess of the 50,000 names required for a public referendum. But officials invalidated a huge number of signatures and the effort failed. Eloy Vallina, watching from the sidelines, made another famous statement, which the press attributed to feelings of guilt. “La corrupción somos todos, nadie se salva. Corruption is all of us, without exception.”
The political fight signaled the importance of San Jerónimo and Santa Teresa. For decades, this lovely brooding stretch of Chihuahuan desert has been ignored by people on both sides of the border. That began to change in the sixties when a man name Charlie Crowder appeared and looked out over the brown hills into Mexico. There were no fences separating the United States and Mexico, nothing indicating where one country stopped and the other began. Crowder visualized a new port of entry, with dignified houses and factories that paid decent wages, arranged in concentric circles around the port.
Soon the bulldozers were roaring through the sage. Crowder worked from dawn to dusk, the brim of his Stetson caked with sweat. When he wasn’t on his bulldozer, he was on airplanes — flying to Mexico City, to Washington, to Santa Fe – selling his vision of a binational utopia, where everyone would live happily ever after, including Charlie Crowder.
These days, Charlie Crowder spends most of his time with his dog, Sandy, in a rented town home that overlooks a golf course in Horizon City, a community located about 20 miles east of El Paso. Although Crowder’s vast border empire is in bankruptcy, he’s not broken man. He’s got a faint wheeze now that’s no doubt due to his years of chain-smoking Capri cigarettes. Beneath his Stetson, his skin looks delicate and pale. But he’s still cracking one-line jokes that once made him such a well-known figure in the borderlands.
Take the bankruptcy case, for instance, a Leviathan affair initiated by his wife more than a decade ago which has swallowed up his assets, including thousands of acres that Sanders now owns; the Santa Teresa Country Club and its two golf courses; a utility company, and enough water rights to supply the annual needs of a small city for 30 years or more.
Crowder shrugs off the loss of his empire with a characteristic joke. “They invited me to a robbery and asked me to attend as the victim. I respectfully declined,” he hoots, grinning at Sandy, a fierce Jack Russell terrier who regards him with a slightly maternal air.
Upon arriving in Santa Teresa, Crowder, purchased about 5,000 acres of land, built the country club and golf courses, and drilled 33 wells. He then filed a declaration with the New Mexico State Engineer, saying he intended to use 110, 712.85 acre feet of water for a binational development. (An acre-foot is about 326,000 gallons, which is enough water to cover an acre of land with one foot of water, or roughly the amount of water used annually by one to three households.)
Along the way, Crowder met numerous Mexican officials, including Adolfo López Mateos, president of Mexico from 1958 to 1964. As Crowder tells it, López Mateos took him aside one day and shared a dream for a “new land bridge” in the Chihuahuan desert that would be surrounded by factories and villages where the workers could live and walk to their place of employment. The factories could import components duty free, have them assembled into products by Mexican laborers, and then export the completed item, paying tariffs only on the assembled portion.
What López Mateos was describing has come to be known as a maquiladora, which comes from the word, maquila, which is the portion of grain that a miller kept in return for grinding a farmer’s grain. “He invented the maquiladora,” says Crowder.
In Juárez, there are now more than 300 maquiladoras, which pay employees anywhere from $40 to $60 for a 48-hour work week. “It’s the mecca of the maquiladora sector,” boasts Héctor “Teto” Murguía. But the maquiladoras that exist in Juárez today, which depend upon workers who often are forced to live in cardboard shanties far from the workplace, are not what Crowder and López Mateos envisioned. “To be successful” says Crowder, “you have to look out for the least advantaged population. And if you don’t do that, you’re creating a burden on them and I would call it an exploitation.”
Crowder’s ideas, which could be described as compassionate capitalism, might seem a little self-serving these days, but a map buried in the behemoth bankruptcy case shows that he actually did plan to create these worker-friendly communities in neat concentric rings around the port of entry.
In the mid-eighties, Crowder was one of several shrewd land speculators who had purchased in advance Arizona ranches that the federal government wanted in order to settle the long-running Hopi-Navajo land dispute. In exchange for two ranches, Crowder picked up 21,000 acres of Bureau of Land Management land in Santa Teresa. He graded roads and offered to donate a chunk of land to U.S. Customs officials for inspection facilities. But opposition to the Santa Teresa crossing was fierce, especially from politicians in El Paso and Juárez, who thought the port might drain some of the income they were making from tolls on the international bridges.
In 1993 when the crossing finally did open, a reporter from the New York Times dropped by. It was a year before the North American Free Trade Agreement went into effect and the “giant sucking sound” of lost jobs that Ross Perot had warned of became audible.
“Mr. Crowder, there’s nothing here,” said the astonished reporter.
Crowder responded, “I think that’s a fair statement and I’m not going to be critical of that. But that’s not what’s important. What’s important is what you don’t see. You don’t see a barrio. You don’t see a land fraud. You don’t see people selling land without water and sewer hook-ups. And you don’t see people living in mud huts, as they do in Juárez.”
By then, the Crowders were deeply in debt. Three years later, his wife filed for Chapter 11 bankruptcy protection and Crowder was drawn into the case. Their creditors doggedly pursued their claims. One of the most aggressive was Catalina Development, an El Paso firm that purchased a $5.4 million bank note owed by the Crowders, which had been secured with three mortgages involving nearly 5,000 acres of land. (Catalina’s founder, Greg Collins, is the brother-in-law of state Rep. Pat Haggerty, an El Paso Republican.)
By 2003, the bankruptcy trustee overseeing the Crowder estate had sold off just about everything but the bulk of the water rights. Crowder, who had drilled the wells and had actually seen the sweet fresh liquid coursing in a southeasterly direction through the pipes, knew the water was the most valuable asset in his dwindling portfolio. If the water fetched a decent price, the Crowders might be able to satisfy their creditors and have a little money left over for them.
Unfortunately, while Charlie Crowder may have been a visionary, his timing was always a little bit off. By 2003, Billy Sanders was on the border, cobbling together a new empire, which would extend from the Pacific Ocean to the Gulf of Mexico, bulge north to encompass Santa Fe and Dallas, and dip as far south as Ciudad Chihuahua.
Verde was formed in the second quarter of 2003. By October of that year, it was negotiating to buy roughly 19,000 acres in Santa Teresa from a family-run corporation. Simultaneously Verde was conducting talks with the bankruptcy trustee to acquire Crowder’s water rights and negotiating with Doña Ana County, the county in which Santa Teresa is located, for water and waste water services. “Everything has to work together. We don’t buy the land if we don’t have the water rights,” Ron Blankenship, Verde Group co-chairman testified in one of the numerous hearings
“And vice versa?” asked a lawyer.
“And vice versa,” responded Blankenship.
By the end of October, Verde and the trustee had a deal: $6.4 million for 18,773 acre-feet of water. That’s the equivalent of roughly six billion gallons and almost enough water to meet the annual needs of a small city. But the land and water deal, one of the largest and most complex in the region, was dependent upon a lot of factors. Chief among them was getting the New Mexico State Engineer, John D’Antonio, who was appointed by Gov. Bill Richardson in 2003, to issue a permit.
It was 2003, the week before Christmas in New Mexico, a time when the spicy scent of burning piñon wood fills the desert air. While most people were shopping or putting out their luminarias, the lawyers involved in the Crowder bankruptcy case trudged in and out of law offices and courtrooms, taking depositions and arguing over Charlie Crowder’s water rights permit.
Water law is almost as arcane and complex as bankruptcy law and the lawyers found themselves wrestling with the many ways a user’s water rights could be defined, such as vested water rights, inchoate water rights, perfected water rights, Mendenhall water rights. Everybody was under deadline pressure – the bankruptcy judge, the attorneys for the creditors, the State Engineer’s Office, officials from Doña Ana County and Sunland Park – because Verde had made it clear that if the water rights permit was not issued to them by the end of the year, then the land sale might not go through and the whole deal could collapse. It soon became apparent that Crowder’s water rights claim – as Charlie had always known – was extremely valuable. It was also clear that Verde, in the words of the bankruptcy trustee, had “political capital.”
The depositions and court testimony reveal that the water permit that Verde was requesting was extremely unusual, perhaps even historic in the lower Rio Grande Basin. In fact, Paul Saavedra a 25-year employee in the New Mexico State Engineer’s Office and head of the water rights division, said he couldn’t recall any entity -– other than the government – obtaining a water rights permit on the magnitude that Verde was requesting.
Since all the water in the lower Rio Grande Basin has already been appropriated by various entities, including New Mexico, Texas and even Mexico (which is entitled to 60,000 acre feet of water annually), state officials in New Mexico routinely turn down new permit requests. In addition, permit holders nowadays are required to provide replacement water up front for any water they pump from the ground. However, since Verde was taking over Crowder’s permit, the new rules didn’t necessarily apply. And Verde, which eventually teamed up with Doña Ana County, might not have to start purchasing replacement water “until the effect of their pumping began depleting the river,” testified one expert.
Although Crowder claimed the right to use more than 110,000 acre feet in the seventies when he drilled his wells, the New Mexico State Engineer didn’t weigh in on the issue until 1994 when Crowder sought permission to change the location of a well. At that time, state officials found that the wells were really only capable of producing 26,423 acre-feet of water for 40 years.
When Crowder appealed the ruling, the State Engineer’s Office set aside the findings. Normally a hearing would have ensued, but Crowder’s attention was diverted elsewhere, and the permit went into limbo for the next nine years. Then the deep-pocketed Verde appeared. The bankruptcy trustee, who had legal control over Crowder’s water rights claim, decided to withdraw Crowder’s 1994 objection, which basically jump-started the permit application process.
One of the key advantages of purchasing Crowder’s water permit was the fact that the state of New Mexico decided that no public notice was required. State officials took the position the notification requirement had been met back in 1994 when Crowder asked for permission to move one well. Without public notice, there would be no public protests, no public hearings, no years of litigation – for the simple fact that no one would ever know about it.
“There isn’t any way that anyone who might be affected by the state engineer’s proposed actions … has ever had a chance in any formal way to know that this action is being considered, is there?” asked attorney Gail Gottlieb, who represented a group of creditors.
“Not that I’m aware of,” testified Paul Saavedra in a deposition.
Saavedra confirmed that under normal conditions the Verde permit could lead to years of litigation. “Because of the amount of water, I would say it would probably be highly contested. So, yes, I would say three years or greater,” he said.
“In fact, that’s a huge amount of water to be permitted, isn’t it?” questioned Gail Gottlieb.
“It’s a big amount of water, yes,” responded Saavedra.
“Would you say it’s unusual for the State Engineer’s Office to be considering a permit for this much water, none of which has been placed to beneficial use?”
“Unusual? Yes,” Saavedra answered.
Saavedra’s deposition, which was taken on Dec. 17, 2003, was contentious. When attorneys for creditors tried to delve into the terms of the permit being prepared by the State Engineer’s Office, the attorney representing the state agency claimed “executive privilege” nine times and instructed Saavedra not to answer the questions.
Saavedra did admit, however, that no studies had been done to evaluate the impact that the Verde pumping would have on other water permit holders despite the fact that such studies were routinely conducted by his office.
After the depositions had been taken, U.S. Bankruptcy Judge Mark McFeeley conducted a two-day hearing on the proposed sale of the water rights. Dan Behles, who was representing Phyllis Crowder, grilled the bankruptcy trustee about Verde Realty.
“Doesn’t it seem strange to you that the only purchaser who has made you what you consider an acceptable offer was able to accomplish without litigation in two months what you say you haven’t been able to accomplish in six years?”
“No, because Verde has a lot of political capital that I don’t have or other people don’t have,” responded trustee Bernard Given.
Later, Behles asked, “Is it your impression that this whole deal was politically rigged?”
“ No, I don’t think anything is politically rigged, but I think the Crowder case has been mired in politics and I have been stuck in the middle,” the trustee responded.
The bankruptcy judge approved the sale of the water rights on Dec. 30. On the same day, the State Engineer issued supplemental findings and a supplemental permit. Under the terms of the deal, Verde and Doña Ana County, the county in which Santa Teresa is located, would be joint owners.
Verde put up the $6.4 million and got a water rights permit to pump 12,000 acre feet and keep another 2,000 acre feet in reserve for nine years. The county received the right to 4,000 to 6,000 acre feet and agreed to expand its water and wastewater facilities to Verde’s development in Santa Teresa and supply any “offset water” when pumping began to have an effect on the surface flow of the Rio Grande. (Asked recently what the county really got out of the deal, Sue Padilla, Doña Ana County assistant city manager said, “That’s a good question.” Padilla added that the county has not yet begun to purchase replacement water called for in the permit, a task that will be handled by a newly formed regional utility.)
As part of the land sale, Verde also agreed to assume $6 million in bond obligations owed by Doña Ana County that were being paid by the previous land owner. Phyllis Crowder’s attorney contended that made the water rights permit worth $12.4 million, but Ron Blankenship, Verde co-chairman said, “My math doesn’t work that way.”
Needless to say, Charlie Crowder was unhappy with the deal. “I’m not a member of the Billionaire Boy’s Club,” he says. “And I suspect the Club had to work together on this.”
Crowder alleges that it was really Bill Richardson, the governor of New Mexico –and a current presidential candidate -– who was behind the decision. “There’s no question about it,” says Crowder. “He (Richardson) runs the state as a feudal empire.”
Verde has contributed generously to Bill Richardson’s political campaigns. The Associated Press reported in mid-December reported that Verde Group and its executives contributed $13,800 to Richardson’s presidential bid. Verde entities and employees also contributed $66,000 to Richardson’s gubernatorial re-election campaign in 2006, the AP reported.
Bill Hume, director of policy and issues for Richardson, insists that the governor did not intervene in the permit process. He did admit, however, that the governor is interested in seeing the Verde development go forward and dispatched Hume himself to solve a long-standing dispute between Sunland Park and Doña Ana County over their utility service territory, an issue that was important to Verde.
About a year and a half after the deal closed, Verde snapped up another 2,500 acre-feet of Crowder water rights for $4.2 million. (The water rights were more expensive because they were “vested,” that is, they had already been put to beneficial use.)
The deal also extinguished any vestigial water rights. “It hurt me too much to laugh and I guess I’m too old to cry,” says Crowder. But laugh he does, a huge guffaw that shakes his body and reddens his face.
“ You have to give Mr. Sanders credit. He was very skilled in gaining one of the most valuable assets in the region. In the process, New Mexico deprived itself of a huge water supply,” he adds.
Crowder removes his straw Stetson and wipes his forehead, the gesture of a man who has spent long hours in the desert sun. Then he launches into the story of a coyote that used to follow him around when Santa Teresa was still mostly wind, dust and dreams.
“He would ignore our equipment and drink water out of the puddles we made. We called him Thirsty. I looked at him several times and he looked at me. And he seemed to be saying, ‘I was here before you and I’ll be here after you’re gone.’
“ He was quite a coyote.”
On typical summer days, the international bridges leading from Juárez to El Paso are clogged with traffic and the wait to enter the United States can be two hours or longer. When temperatures rocket past 100 degrees, radiators often explode and the vehicles are dragged off to the side like dead animals.
The heat and fumes from hundreds of idling engines don’t deter the window washers, food vendors and souvenir hawkers, who weave in and out of traffic lanes carrying squeegees and buckets, platters of fudge and fruit, and Spider Man pictures. In the wavering air, they resemble mirages.
A block away is the Presidencia Municipal, the building that houses the city government offices and the mayor’s office. While the vendors hawked their wares to captive motorists, then Juárez mayor Héctor Murguía sat in his large, air-conditioned office boasting about the city’s virtues. “ We have an excellent labor force, a skilled knowledge sector. We have peace, complete tranquility. We have stability. We have a very good quality of living.”
While Murguía talks, aides come and go, speaking softly in Spanish on cell phones that are clicked shut with a flick of the wrist. His desk is long and polished, and devoid of bric a brac. On the shelf behind him are the Mexican flag and dozens of plaques. A television crew was waiting in another room, but Murguía didn’t seem to care.
Murguía speaks excellent English and enjoys having his picture taken. But when the conversation veers into controversial topics, he becomes pugnacious, answering questions with his own questions and berating the media for blowing issues out of proportion. Asked if he knows Bill Sanders, Murguía says he met him twice. Rounding his shoulders and leaning forward, he adds, “What is the importance if I meet with Bill Sanders?”
During his three-year term, Murguía fostered several projects, which could greatly alter the city’s growth in the coming decades, including the San Jerónimo project, a redevelopment plan for downtown Juárez, and the construction of the Camino Real.
A six-lane highway that will cost millions of dollars, the Camino Real will eventually connect downtown Juárez with western settlements, such as Lomas de Poleo and San Jerónimo and shave thirty minutes or more off the trip to the Santa Teresa Port of Entry. During Murguía’s tenure, 23 kilometers of the 72-kilometer road were constructed. “The Camino Real is the hope for 450,000 people who live on the poor side of the city,” says Murguía. “It’s going to connect all those colonies that have been forgotten.”
But many activists in Juárez allege the highway, which is so dangerous that it’s been closed for repairs, is being built for the benefit of wealthy developers, such as Pedro Zaragoza and Eloy Vallina. The construction costs, adds Juan Hernán III Ortiz Quintana, a professor at the Universidad Autónoma De Ciudad Juárez, have practically bankrupted the city and left it unable to meet other basic services. “It’s like buying a car and not having money to buy food for your family.”
Another urban development special, Maria Luisa Garcia Amaral, said in an interview with El Diario, a Juarez newspaper, that the highway might even put surroundings neighborhoods in danger because the blasting through the Sierra de Juárez has dramatically altered drainage patterns. “Who came up with the idea of making the Camino Real, a road that leads nowhere, doesn’t connect with anything – and worst of all – that still has no exit ramps, no shoulders for automobiles and no sidewalks for pedestrians?” she asked. “He (Murguía) says that with the Camino Real we’ve now entered the first world. That must be because it almost goes up to the border city of El Paso – the most depressing city in the United States.”
With all the cross-border pollination, it’s no surprise that Ciudad Juárez has embarked upon its own ‘revitalization’ plan. Parts of downtown already look like Baghdad: Buildings with gaping holes; piles of dirty grey cement and dangling wires; and here and there, the remnants of a brilliantly colored interior wall. About 80 buildings have already been demolished in the zona rosa, the red-light district, confirmed Arcadio Serrano, former director of public works. Another 200 to 300 structures are also targeted for destruction outside of this district, he added.
Carlos Morales, who heads the city’s housing department, said the demolition was part of the city’s effort to modernize the urban core and get rid of businesses that detract from the new, upscale image that the Ciudad Juárez hopes to project. “We are destroying these buildings precisely to modernize our historic downtown,” he said.
The renovations will undoubtedly benefit Verde, which has snapped up thousands of square feet of industrial space in Juárez. Eventually the real-estate firm hopes to develop seven million square feet that can be used for manufacturing, distribution, and assembly processes.
It looks as if Verde will have the customers to fill them. Woody Hunt, an El Paso developer and the largest builder of military housing in the country, says Juárez lost a lot of companies at the beginning of the decade, but the process has reversed in the last three years. “The number of companies has expanded significantly. The city’s gone to new highs in terms of employment,” says Hunt, who has no ties to Verde and could even be considered a distant competitor.
With their new face lifts, Juárez and El Paso may one day become the shimmering buckle in Verde’s planned manufacturing belt. But activist Willivaldo Delgadillo says the companies need to pay their fair share of the costs for infrastructure and social services. And the factories need to pay better wages. “We don’t need any more $60-a-week jobs.”
The next wave of globalization is cresting over both cities. Once again, the rich are on the move and the poor are being moved out – from El Paso’s Segundo Barrio, from downtown Juárez, from Lomas de Poleo, and from all the small communities along the gleaming Camino Real.
Politicians and business leaders maintain the new binational developments will bring economic prosperity, yet statistics show that some of the poorest communities in North America remain along the international boundary line. Raw sewage and toxic waste contaminate the rivers and land. Air pollution levels greatly exceed EPA standards. Diseases such as hepatitis, diabetes and tuberculosis are rampant. In 2000, Claud Earl Fox, head of the U.S. Health Resources and Services Administration, said that if the border were the fifty-first state, it would rank last in health care, last in per capita income, and first in the number of school children living in poverty. In Juárez, the picture’s equally bleak. Gangs are proliferating, the murder rate is high, and the drug trade is booming. “ In some ways, our city is broke,” says Mexican journalist Julian Cardona.
Cardona alleges that powerful developers like Bill Sanders, Eloy Vallina and Pedro Zaragoza are partly responsible for the dysfunction. “This gang of entrepreneurs is immoral. They have created the social conditions that create rampant crime and violence that is exploding every day on Juárez streets. They have been speculating with the welfare of the citizens of Juárez. Bill Sanders and the rich people in El Paso are as immoral as the people in Juárez. Anyone who participates is the same,” he contends.
same plan on both sides of the border. It’s the same land speculators who sit on each others boards and who are carrying out large-scale displacement and land grabs. If the powerful are organized at a bino need to join together. We need to form binational coalitions against el despojo—against the theft of our homes and our barrios—that is being carried out in the name of regional development.”