Mexico's "Most Powerful Woman" Arrested For Stealing Million From Teachers' Union



TOLUCA - Forbes magazine named her the “most powerful woman in Mexico” in 2012, but now Elba Esther Gordillo, 68, is under arrest for embezzling more than $156 million dollars from the country's main teachers union.

Esther Gordillo, former head of Mexico's long-ruling PRI party and longtime teachers union chief, was arrested late Tuesday, a day before the government submitted major educational reforms aimed at limiting her power. She is accused of running up a million-dollar tab at Neiman Marcus, and using embezzled funds to pay for plastic surgery.

Mexican Attorney General Jesus Murillo Karam stated: “We are looking at a case in which the funds of education workers have been illegally misused for the benefit of several people, among them, Elba Esther Gordillo.”

She was officially detained with criminal charges of illegal operations of “illicit origin”, which amount to 2.6 billion pesos (around $125 million), and cannot be released under bail.

Esther Gordillo is accused of having used some of the funds to pay for cosmetic surgeries, two residences in California, trips on private jets, shopping in expensive luxury stores and art galleries, with the help of corrupt collaborators who helped “triangulate” the resources.

El Universal reports that the “teacher” as they call her, declared 1.1 million pesos (around $86,000) in revenue from 2009 to 2012, while, in reality, she spent around 80 million pesos (around $6 million). The Attorney General declared that between March 2009 and January 2012, there were money transfers to Neiman Marcus totaling $2.1 million.

President Enrique Peña Nieto has pushed forward the reforms that seek to change a system dominated by Esther Gordillo as direct and indirect President of the Teachers Labor Union (SNTE) since 1989, in which it was widely known that teaching positions could be sold or inherited.

Esther Gordillo was also Secretary General of the PRI party from 2002 to 2005, and served in both the Senate and Chamber of Deputies.

Milenio reports, that she was arrested yesterday around 7:00 pm in the airport of Toluca and spent the night in the women’s correctional center of Santa Martha Acatitla.

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Debt Trap: Why South Korean Economics Explains Squid Game

Crunching the numbers of South Korea's personal and household debt offers a glimpse into what drives the win-or-die plot of the Netflix hit produced in the Asian country.

In the Netflix series, losers of the game face death

Yip Wing Sum


SEOUL — The South Korean series Squid Game has become the most viewed series on Netflix, watched by over 111 million viewers and counting. It has also generated a wave of debate online and off about its provocative message about contemporary life.

The plot follows the story of a desperate man in debt, who receives a mysterious invitation to play a game in which the contestants gamble their lives on six childhood games, with the winner awarded a prize of 45.6 billion won ($38 million)... while the losers face death.

It's a plot that many have noted is not quite as surreal as it sounds, a reflection of the reality of Korean society today mired in personal debt.

Seoul housing prices top London and New York

In the polished streets of downtown Seoul, one sees endless cards and coupons advertising loans scattered on the ground. Since the outbreak of the pandemic, as the demand for loans in South Korea has exploded, lax lending policies have led to a rapid increase in personal debt.

According to the South Korean Central Bank's "Monetary Credit Policy Report," household debt reached 105% of GDP in the first quarter of this year, equivalent to approximately $1.5 trillion at the end of March, with a major share tied up in home mortgages.

Average home loans are equivalent to 270% of annual income.

One reason behind the debts is the soaring housing prices. In Seoul, home to nearly half of the country's population, housing prices are now among the highest in the world. The price to income ratio (PIR), which weighs the average price of a home to the average annual household income, is 12.04 in Seoul, compared to 8.4 in San Francisco, 8.2 in London and 5.4 in New York.

According to the Korea Real Estate Commission, 42.1% of all home purchases in January 2021 were by young Koreans in their 20s and 30s. For those in their 30s, the average amount borrowed is equivalent to 270% of their annual income.

Playing the stock market

At the same time, the South Korean stock market is booming. The increased demand to buy stocks has led to an increase in other loans such as credit. The ratio for Korean shareholders conducting credit financing, i.e. borrowing from securities companies to secure stock holdings, had reached 21.4 trillion won ($17.7 billion), further increasing the indebtedness of households.

A 30-year-old Seoul office worker who bought stocks through various forms of borrowing was interviewed by Reuters this year, and said he was "very foolish not to take advantage of the rebound."

In addition to his 100 million won ($84,000) overdraft account, he also took out a 100 million won loan against his house in Seoul, and a 50 million won stock pledge. All of these demands on the stock market have further exacerbated the problem of household debt.

42.1% of all home purchases in January 2021 were by young Koreans in their 20s and 30s

Simon Shin/SOPA Images/ZUMA

Game of survival

In response to the accumulating financial risks, the Bank of Korea has restricted the release of loans and has announced its first interest rate hike in three years at the end of August.

But experts believe that even if banks cut loans or raise interest rates, those who need money will look for other ways to borrow, often turning to more costly institutions and mechanisms.

This all risks leading to what one can call a "debt trap," one loan piling on top of another. That brings us back to the plot of Squid Game, "Either you live or I do." South Korean society has turned into a game of survival.

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