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The New Corporate Colonialism
How BlackRock built its Mexican infrastructure business through a tangled web of
cronyism, corruption and conflicts of interest
Overview
Since 2011, BlackRock, the world’s largest asset manager, has rapidly expanded its
presence in Mexico, buying local companies, expanding its in-country operations,
appointing and hiring key Mexican business and political leaders and aggressively
ramping up its infrastructure financing business.
As Mexico has sought badly needed foreign direct investment, BlackRock has
masterfully negotiated the country’s byzantine system of cronyism and political
patronage to get a favored seat at the table. While this has undoubtedly been good for
BlackRock’s bottom line, many Mexicans question whether the firm’s activities have
been good for them. And while BlackRock’s CEO, Larry Fink has worked to cultivate a
profile as a promoter of a more transparent and benevolent vision of capitalism, his firm’s
aggressive inroads into Mexico appear to have benefited from, and even reinforced, the
country’s stubborn corruption.
Over the last several years, BlackRock has not only expanded its presence in Mexico but
strengthened ties to the some of the country’s most powerful people. Marco Antonio Slim
Domit, the son of Mexico’s richest man, Carlos Slim, joined BlackRock as a board
member in 2011. 1 The country’s former undersecretary of finance Gerardo Rodríguez
Regordosa joined the company as a managing director in 2013.2 In mid-2015 the
company had a 50-member team in its Mexico office managing approximately $26
billion in assets.3 By 2017, it acquired the asset management business of Mexico’s
Citibanamex, a transaction involving another $31 billion in assets.4
It has aggressively moved into pensions as well, successfully capitalizing on regulatory
changes allowing global asset managers to manage Mexican pensions on behalf of
Mexican workers. 5

1

Mary Pilon, Son of the World’s Richest Man Joins BlackRock Board, The Wall Street Journal, September
27, 2011, available at https://blogs.wsj.com/deals/2011/09/27/son-of-the-worlds-richest-man-joinsblackrock-board/.
2
BlackRock hires emerging markets managing director, FTSE Global Markets, April 11, 2013, available at
http://www.ftseglobalmarkets.com/news/blackrock-hires-emerging-markets-managing-director.html.
3
BlackRock to Acquire Infraestructura Institucional, Business Wire, June 12, 2015, available at
https://www.businesswire.com/news/home/20150612005330/en/BlackRock-Acquire-InfraestructuraInstitucional.
4
BlackRock Press Release, BlackRock to Acquire Asset Management Business of Citibanamex, November
28, 2017, available at http://ir.blackrock.com/file/Index?KeyFile=391251077.
5 (Spanish) Gabriela Huerta, Afore XXI Banorte tambien aumenta su mandato con Schroders, Funds
Society, available at http://www.m.fundssociety.com/es/noticias/negocio/afore-xxi-banorte-tambienaumenta-su-mandato-con-schroders.

1

 But BlackRock Mexico’s infrastructure financing business is where the company has
placed its biggest bets. Encouraged by a new and charismatic president, Enrique Peña
Nieto, who committed to opening up the country and its energy sector to foreign
infrastructure investment, BlackRock rushed in, buying infrastructure management
companies, toll roads, hospitals, gas pipelines, prisons, and oil exploration businesses.
For BlackRock, international infrastructure makes sense. The demand for higher-yielding
investment options, with predictable returns is stronger than ever and infrastructure
investments fit the bill in this regard. BlackRock’s strategy is to meet that demand through
alternative investment offerings like real estate, commodities and infrastructure.6 7
But BlackRock’s infrastructure ambitions have also clashed with Chairman Fink’s
kinder, gentler vision of capitalism, opening the company to charges of hypocrisy for its
aggressive business ambitions in a country that Transparency International still ranks as
among the world’s most corrupt.8
“Society is demanding that companies, both public and private, serve a social purpose,”
Fink wrote in his annual letter to shareholders and company CEOs this past January. 9 In
Mexico however, the record shows that BlackRock has often not adhered to those
standards, becoming one of the largest and most influential private infrastructure
investors in the country by making deals and striking relationships with a menagerie of
shady characters.
Fink is chummy with the highly unpopular Peña Nieto and other key Mexican officials
and business leaders linked to corruption. BlackRock has numerous business partnerships
with state-owned PEMEX – a company where “corruption is everywhere and at all levels
of the hierarchy” according to a former PEMEX CEO. 10 Such relationships reveal a
glaring inconsistency between BlackRock’s “social purpose” rhetoric and its actual
business behavior.

6

William L. Watts, Institutional investors want real estate, real assets, BlackRock survey finds,
MarketWatch, January 16, 2014, available at
http://blogs.marketwatch.com/thetell/2014/01/16/institutional-investors-want-real-estate-real-assetsblackrock-survey-finds/.
7
https://www.blackrock.com/institutions/en-axj/investment-capabilities-and-solutions/alternativestrategies.
8
Alexandra Ma, These are the most corrupt countries in the Western world, Business Insider, February 21,
2018, available at https://www.businessinsider.com/list-most-corrupt-western-nations-on-transparencyinternational-list-2018-2.
9
Larry Fink, Larry Fink’s Annual Letter to CEOs: A Sense of Purpose, BlackRock, January 17, 2018,
available at https://www.blackrock.com/corporate/investor-relations/larry-fink-ceo-letter.
10
Ronald Buchanan, ‘Corruption is Everywhere’ Within Company, Says Former Pemex Chief, Natural
Gas Intel, April 5, 2018, http://www.naturalgasintel.com/articles/113934-corruption-is-everywhere-withincompany-says-former-pemex-chief.

2

 BlackRock’s Larry Fink toasts Mexican President Peña Nieto after PEMEX deal in July 2015

A detailed examination of the record by the BlackRock Transparency Project shows
repeated instances of the Peña Nieto administration appearing to ensure BlackRock’s
infrastructure deals succeeded.
In one case, an oil and gas company acquired by BlackRock through the purchase of a
subsidiary only a month prior, won a major exploration bid by state-owned PEMEX. The
bid was the only one awarded in the country’s first public tender process to open
exploration to private companies.
In another case, the Peña Nieto administration inexplicably raised payments by 18
percent to a prison contractor who had repeatedly missed construction deadlines just
before BlackRock bought the project.
In a third case, President Peña Nieto signed an executive order expropriating 91 acres of
land for a toll road construction project marred by local protests less than a month after
BlackRock’s acquisition of the project’s owner.
Among BTP’s other findings:
•

Over the past seven years, BlackRock and Larry Fink created a remarkably close
partnership with the Peña Nieto Administration and state-owned petroleum company
PEMEX, meeting frequently with the president and his finance minister in Mexico
and New York and signing several infrastructure and energy partnerships and
agreements – at least one without a transparent and competitive bidding process.

•

BlackRock took advantage of Mexican President Peña Nieto’s 2013 energy reforms
and its relationships with top PEMEX execs to invest at least a billion dollars,
including hundreds of millions of Mexican pension assets, in oil and gas exploration

3

 projects and gas pipelines. This prompted outrage from across Mexico that average
people’s financial security could be put at risk.
•

BlackRock has benefited from an almost continuous “revolving door” relationship
with the Mexican government since Peña Nieto assumed office. In 2013, the company
hired Mexico’s former undersecretary of finance and credit, Gerardo Rodriguez
Regordosa (an expert in pensions and infrastructure), presumably to capitalize on
infrastructure investment opportunities in President Peña Nieto’s development and
infrastructure plans.

•

The revolving door has swung the other way as well: BlackRock’s Mexico CEO Isaac
Volin became general director of PEMEX subsidiary PMI Comercio Internacional in
2016. As the new head of the company’s international trading arm, Volin, for all
practical purposes was PEMEX’s second in command, overseeing numerous PEMEX
subsidiaries – including some that have alleged involvement in notorious tax haven
scandals.

•

In 2015, BlackRock purchased Infraestructura Institucional (aka “I Cuadrada”), an
infrastructure investment fund closely tied to Mexico’s top political elites. Only one
month after BlackRock’s acquisition, an oil and gas company in I Cuadrada’s
portfolio received a major oil exploration and drilling contract from PEMEX, the only
award granted.

•

BlackRock’s purchase of I Cuadrada came with several other problems as well,
including numerous allegations of contractors involved in corruption, conflicts of
interest, waste, fraud and project mismanagement.

Throughout it all, BlackRock and its powerful CEO refined the company’s access and
influence business model to aggressively court top Mexican business elites and
politicians for business deals with almost unlimited impunity.
While BlackRock’s record of questionable behavior in Mexico is troubling enough, its
focus on public private partnerships raises larger concerns: Allowing large asset
managers to operate and control public infrastructure assets that taxpayers have funded,
sometimes for decades, can force governments to decide between two bad economic
outcomes -- using taxpayer resources to subsidize uneconomic projects or forcing
pensioners to take losses.
The recent landslide election of Andrés Manuel López Obrador (“AMLO”), who has
promised to curb corruption in Mexico, may spell trouble for Larry Fink and
BlackRock’s future infrastructure ambitions. AMLO has criticized Peña Nieto’s energy
reforms, and on the campaign trail has promised to re-examine contracts tainted by
influence and corruption.11 He has also called out the suspicious timing of the sale of I
11

The Economist Intelligence Unit, AMLO’s policies under scrutiny, The Economist, April 13, 2018,
available at http://country.eiu.com/article.aspx?articleid=626612446&Country=Mexico&topic=Politics.

4

 Cuadrada to BlackRock a mere month before one of the company’s major oil and gas
investments won a major PEMEX contract.
His choice for energy minister, Rocío Nahle García, a fiery former legislator, has
criticized the employment revolving door between BlackRock and PEMEX as well as the
energy reforms of the Peña Nieto administration.
On the other hand, there have already been hints that overhauling Mexico’s system of
corruption and cronyism will be easier said than done. In what appeared to be a change of
heart, the populist candidate backed away from some of his campaign promises as
Mexico’s Presidential election approached this summer – vowing that energy contracts
would not be canceled, only reviewed, and reassuring investors that he was not a “radical
leftist.”
Importantly, AMLO’s moderation coincided with a May 2018 meeting with the 28th most
powerful person in the world – BlackRock CEO Larry Fink.12 It now seems that AMLO,
like Peña Nieto before him, could embrace the political benefits he can garner from
BlackRock’s power.
Introduction
The July 2012 Presidential election of Enrique Peña Nieto provided the catalyst to put
Fink’s Mexico infrastructure ambitions into play. The two had met privately in New York
City the previous November during the campaign where the candidate laid out his
economic vision and courted Wall Street investors to take a new look at opportunities in
the country’s rapidly growing economy.13
One year later, in 2013, BlackRock’s annual report included an entire section titled “The
Infrastructure Opportunity” in which CEO Larry Fink wrote that, “governments simply
cannot afford to self-fund infrastructure projects” and that pension funds were “ideally
suited” to fill the financing void. 14
Fink’s “access and influence” business model is ideally suited to public private
partnerships for infrastructure deals. The company often touts its “exclusive access to
senior executives and leaders at a government and corporate level” for ‘off-market deal
flow.’”15 And the company continues to be a landing spot for senior ex-government

12

The World’s Most Powerful People: 2018 Ranking, Forbes, May 8, 2018, available at
https://www.forbes.com/powerful-people/list/#tab:overall.
13
(Spanish) Busca Enrique Pena Nieto inversionistas en EU, La Primera Plana, November 17, 2011,
available at http://laprimeraplana.com.mx/busca-enrique-pena-nieto-inversionistas-en-eu/.
14
BlackRock Inc., 2013 Annual Report, Page 15, available at
http://ir.blackrock.com/Interactive/newlookandfeel/4048287/annual/2013AR/blackrock_0415a/assets/pdfs/
BlackRock_AR13_AllPages.pdf.
15
https://www.blackrock.com/institutions/en-us/strategies/real-assets/infrastructure#investment-access.

5

 officials – BlackRock has hired at least 84 former government officials, regulators and
central bankers since 2004.16
The timing of Peña Nieto’s victory couldn’t have been better for BlackRock. Only a year
earlier it launched a new infrastructure group within its Alternative Investors division
headed by Jim Barry, the former CEO of Dublin-based infrastructure developer NTR
plc.17 Barry’s new division was originally focused on identifying investment
opportunities in renewables and alternative energy, but appears to have quickly pivoted to
aggressively looking for new infrastructure plays globally.18 “There is massive
institutional interest in owning these [infrastructure] assets,” Barry said in early 2013.
The asset manager’s 2012 purchase of Swiss Re, a private equity fund that specialized in
investing in infrastructure showed that Barry and BlackRock meant business.19 Peña
Nieto’s promised economic reforms provided the perfect opportunity.
Days after his July election victory, Peña Nieto named his campaign coordinator Luis
Videgaray to oversee Mexico’s new economic reforms.20 By September, Videgaray was
appointed finance minister and quickly set to work negotiating the new President’s
“Pacto por Mexico”.21
The Government’s ambitious economic plan included pension reforms; expansion and
modernization of the country’s roads, ports, rail network and energy resources; and
perhaps most importantly, the opening of Mexico’s state oil monopoly Petróleos
Mexicanos (PEMEX) to private investment for the first time in the company’s 76-year
history.22

16

The BlackRock Revolving Door, BlackRock Transparency Project, June 27, 2018, available at
http://blackrocktransparencyproject.org/2018/06/27/the-blackrock-revolving-door/.
17
https://www.blackrock.com/institutions/en-us/biographies/jim-barry.
18
Emmet Oliver, NTR seals deal with global powerhouse BlackRock, The Independent, March 1, 2011,
available at https://www.independent.ie/business/irish/ntr-seals-deal-with-global-powerhouse-blackrock26709424.html;
Amy Or, BlackRock to compete with Blackstone in direct PE, MarketWatch, July 18, 2012, available at
https://www.marketwatch.com/story/blackrock-to-compete-with-blackstone-in-direct-pe-2012-07-18.
19
Louise Bowman, Institutional buyers jostle for position in new infrastructure debt market, Euromoney,
January 29, 2013, available at https://www.euromoney.com/article/b12kjwcll11hcd/institutional-buyersjostle-for-position-in-new-infrastructure-debt-market.
20
(Spanish) Pena Nieto anuncia a su primer equip de trabajo para tomar la presidencia., Expansion, July 11,
2012, available at https://expansion.mx/nacional/2012/07/11/pena-nieto-anuncia-a-su-primer-equipo-detrabajo-para-tomar-la-presidencia
21
David Luhnow, The Man Behind Mexico’s Top Candidate, The Wall Street Journal, April 27, 2012,
available at https://www.wsj.com/articles/SB10001424052702304331204577352453990414074;
(Spanish) Enrique Hernandez, Videgaray fue fundamental para el Pacto por Mexico, Forbes Mexico,
September 7, 2016, available at https://www.forbes.com.mx/videgaray-fue-fundamental-para-el-pacto-pormexico-segob/.
22
(Spanish) Embajada de Mexico En Italia, Pacto por Mexico, December 2, 2012, available at
https://embamex.sre.gob.mx/bolivia/images/pdf/REFORMAS/pacto_por_mexico.pdf; Dolia Estevez, After
76 Years of Nationalism, Oil-rich Mexico Welcomes Foreign Capital, Forbes, August 14, 2014, available
at https://www.forbes.com/sites/doliaestevez/2014/08/14/after-79-years-of-nationalism-oil-rich-mexicowelcomes-foreign-capital/#4771081110c1.

6

 Peña Nieto’s new government published another ambitious National Development Plan
on May 20, 2013.23 According to lawyers Hans Goebel and Gunter Schwandt, writing for
the International Financial Law Review (IFLR), more than half of the President’s
commitments were related to infrastructure and, importantly for BlackRock, included
new strategies to court capital markets and private equity participants to help finance
Mexico’s ambitious infrastructure commitments.24
One way to do that, according to Goebel and Schwandt, was to tap money invested in
Mexican pension funds known as SIEFORES (sociedades de inversion especializadas de
fondos para el retiro). Important regulatory changes in 2009 opened the door for the
private financial institutions that managed Mexican pension funds (known as
administradoras de fondos para el retiro or AFORES) to invest a significant portion of
their assets in domestic private equity and infrastructure projects.25
Another important change came from Mexico’s pension regulator CONSAR in March
2011. That reform allowed AFORES to employ external asset managers to oversee a
portion of Mexico pension assets for the first time ever.
For large foreign asset managers like BlackRock, the regulatory change was welcome
news. Isaac Volin, BlackRock’s Mexico CEO noted in 2012 that the regulatory move
was “a positive development for the system, because it will allow workers funds to be
invested in a better way and be in a better position to take advantage of the current
limitations to investments.”26
Volin, who joined BlackRock in May 2010, was also ideally situated to help the company
capitalize on Mexico’s regulatory changes: He previously served as the vice president of
financial planning at CONSAR until 2005 and also spent six years with Mexico’s CNBV,
the regulatory authority for the country’s banking and financial sector.27
To capitalize on the opportunities in the President’s National Development Plan,
BlackRock hired other politically connected former government officials as well,

23

(Spanish) http://www.cofemer.gob.mx/documentos/marcojuridico/rev2016/PND%202013-2018.pdf.
Hans P. Goebel and Gunter A. Schwandt, Financing Mexico’s next infrastructure wave, International
Financial Law Review, August 27, 2013, available at http://www.iflr.com/Article/3248098/FinancingMexicos-next-infrastructure-wave.html.
25
Deloitte, Creation of value through alternative financing sources, available at
https://www2.deloitte.com/content/dam/Deloitte/global/Documents/About-Deloitte/gx-deloitte-real-estatecerpis-and-ckdes-2016.pdf.
26
SLT looks closely at a market that, despite reforms, is still proving remarkably stubborn when it comes to
securities lending, Securities Lending Times, May 29, 2012, available at
http://www.securitieslendingtimes.com/countryfocus/country.php?country_id=64.
27
(Spanish) Isaac Volin llega a BlackRock Mexico, Expansion, May 17, 2010, available at
https://expansion.mx/negocios/2010/05/17/blackrock-mexico-nombra-director;
(Spanish) Press Release, La Junta de Gobierno de la CONSAR celebrará mañana 18 de marzo su reunión
extraordinaria en la que se propondrá al Act. Gabriel Ramírez Fernández como nuevo Vicepresidente de
Planeación de la CONSAR, Consar, March 17, 2005, available at
https://www.gob.mx/cms/uploads/attachment/file/62473/bol_05_05_Vicepresidente_de_Planeacio_n.pdf.
24

7

 including Gerardo Rodriguez Regordosa, Mexico’s former Undersecretary of Finance
and Public Credit during the administration of Felipe Calderon. 28
Rodriguez Regordosa, who joined the company on April 22, 2013 as a managing director,
brought a keen understanding of Mexico’s pension system and infrastructure priorities to
the company: As head of Mexico’s Public Credit Unit from 2005 to 2011, Regordosa was
in charge of activities related to the development of such infrastructure projects.
And as Undersecretary, two of Rodriguez Regordosa’s key roles included the evolution
and operation of the nation’s retirement and pension system and helping craft Mexico’s
infrastructure investment policy.
The new managing director’s pedigree may have been important to BlackRock for
another reason as well: During his stint as Undersecretary of Finance and Public Credit
he served on PEMEX’s Board of Directors.29
In addition to the National Development Plan, the Peña Nieto Administration also
released a National Infrastructure Plan a year later in April 2014. The ambitious $590
billion public-private investment plan included 743 infrastructure projects in energy,
communications, transportation, health and urban development. 30
BlackRock lauded the plan in a report titled “Infrastructure Rising: An Asset Class Takes
Shape” in 2015, quoting OECD that the pace of reform in Mexico was “breathtaking”
and calling the Administration’s reforms “sweeping” and “ambitious.”31
With key regulatory changes allowing pension fund investments in infrastructure projects
and an aggressive National Development Plan in place, the President turned his attention
to the signature policy of his Administration, energy reform.
BlackRock Champions President Peña Nieto’s Energy Reforms
A month after Peña Nieto assumed the presidency, Fink’s enthusiasm for Mexico was
unmistakable. “I love Mexico. Mexico is an incredible growth story,” Fink gushed to
CNBC’s Mario Bartiromo in January 2013. “It’s an energy story. It’s a cheap labor story

28

BlackRock hires emerging markets managing director, FTSE Global Markets, April 11, 2013, available
at http://www.ftseglobalmarkets.com/news/blackrock-hires-emerging-markets-managing-director.html;
(Spanish) Subsecretario de Hacienda y Credito Publico, Blog de la Presidencia, available at
http://calderon.presidencia.gob.mx/blog/semblanza-gerardo-rodriguez/.
29
Business Plan 2013-2017, PEMEX, Page 4, June 11, 2014, available at
https://www.slideshare.net/oswaldohernandezmartinez14/pemex-35751758?from_action=save.
30
Anthony Harrup, Mexican Government Boosts Infrastructure Investment Plan, The Wall Street Journal,
April 28, 2014, available at https://www.wsj.com/articles/mexican-government-boosts-infrastructureinvestment-plan-1398718566.
31
BlackRock, Infrastructure Rising: An Asset Class Takes Shape, Page 10, April 2015, available at
https://www.laforum.co.uk/download-manager/download-white-paper/220/.

8

 and it’s a great location story relative to the United States. So Mexico is a great place to
be.” 32
Seven months later in August 2013, Peña Nieto proposed changes to Mexico’s
constitution allowing private companies to contract with PEMEX to drill for oil and gas
and share profits with the energy monopoly. The move opened up Mexico’s energy sector
to private, foreign investors for the first time since President Lazaro Cardenas had
nationalized the country’s oil reserves back in 1938.33
In a Bloomberg interview days after the President’s announcement, BlackRock Senior
Portfolio Manager Will Landers praised the move as good for Mexico’s economic
growth, predicting that the changes could increase the growth of Mexico’s GDP from
3.5% to 5% over three to five years.34
BlackRock CEO Larry Fink praised the move as well: “Mexico is at the beginning of a
real revolution,” he said at a UCLA event on October 3rd. Peña Nieto’s plan to end the
PEMEX monopoly would make Mexico one of the world’s biggest energy producers, he
said, noting that Mexico had become his favorite international destination to put money.35
At a New York Times Dealbook conference in November, Fink again praised the
President’s reforms: “When you look at the world right now… and you see which
governments are actually doing something on the structural side that is good for their own
economy that goes against their own popularity… Mexico is right there,” Fink said. “If I
were 22 years old and I didn’t know what I wanted to do, I would move to Mexico right
now because I think the opportunity is huge there.”36
A month later, on December 13, 2013, Mexico’s Congress approved the President’s
energy reform package allowing private foreign companies to drill for oil and gas and
share profits with PEMEX.37 The President signed the bill into law eight days later on
December 21st.38

32

Maria Bartiromo, BlackRock’s Fink: Investors Moving Into Equities, CNBC, January 17, 2013, available
at https://www.cnbc.com/video/2013/01/17/blackrocks-fink-investors-moving-into-equities.html?play=1.
33
David Argen, Mexico proposes to open up oil to foreigners, USA Today, August 12, 2013, available at
https://www.usatoday.com/story/news/world/2013/08/12/mexico-oil/2642629/.
34
Mexico’s Oil Reform, Bloomberg, August 20, 2013, available at
https://www.youtube.com/watch?v=7mfxnyrdTjk.
35
Katia Porzecanski, BlackRock’s Fink is Captivated by PIMCO Favorite Mexico, Bloomberg, October 7,
2013, available at http://www.snellrealestate.com/news/blackrocks-fink-captivated-pimco-favorite-mexicobloomberg.
36
Robert Stowe England, In an Emerging-Markets Slide, Mexico Holds Steady, Institutional Investor,
February 5, 2014, available at https://www.institutionalinvestor.com/article/b14zbgts9nws3y/in-anemergingmarkets-slide-mexico-holds-steady.
37
The Mexico Institute, Mexican Oil and Gas: Christmas Arrives Early, Forbes, December 12, 2013,
available at https://www.forbes.com/sites/themexicoinstitute/2013/12/12/mexican-oil-gas-christmasarrives-early/#3a16ebcd3f81.
38
Mexican president signs controversial oil and gas law, BBC, December 21, 2013, available at
https://www.bbc.com/news/world-latin-america-25471212.

9

 While the approval may have been a victory for BlackRock, the reforms were highly
controversial among many Mexicans.39 Most were vigorously opposed to opening
PEMEX to private investors, believing that Mexico’s oil reserves were a source of
national pride and should remain a public resource. In fact, the country celebrates the
1938 nationalization of its oil resources with a public holiday every March 18th.40
Prior to its passage, opposition legislators blockaded the entrance to Congress in an
attempt to prevent a vote on the legislation.41 Antonio García, a PRD legislator even
stripped off his clothes on the floor of Congress to
protest the “stripping of Mexico’s oil wealth.”42
After the vote, Ricardo Monreal, the leader of
the leftist Citizens’ Movement in the Chamber of
Deputies summed up the thoughts of many
Mexican citizens: “Today is a black day. More
poverty for everyone, which has been the rule for
Mexican privatizations.”43
Mexican protests before 2012 energy

In an indication of just how closely aligned
reform vote
BlackRock and the Peña Nieto Administration
were on the country’s energy and economic reforms, Fink and Luis Videgaray – the
President’s finance minister and the architect of his economic and energy reform
packages – took a victory lap on the same episode of PBS’ Charlie Rose two months later
on February 11, 2014.44
Charlie Rose: I had the finance minister from Mexico here and he's going to be
on the same program with you tonight. And they came in, PRI Party the president,
he's the finance minister -- they got three parties to agree. And I thought this will
not happen.
Larry Fink: What President Nieto did alongside his finance minister and the
Central Bank is really one of the more inspiring moments. And this is why we are
so bullish on Mexico. I happened to see the finance minister yesterday too…

39

Dolia Estevez, Most Mexicans oppose President Pena Nieto’s plan to open up Pemex to private
investment, Forbes, June 26, 2013, available at
https://www.forbes.com/sites/doliaestevez/2013/06/26/most-mexicans-oppose-president-pena-nietos-plansto-open-up-pemex-to-private-investment/#66c0a38d1a4b.
40
https://www.timeanddate.com/holidays/mexico/oil-expropriation.
41
Dave Graham, Mexican Congress passes radical shake-up of oil industry, Reuters, December 12, 2013,
available at https://www.reuters.com/article/us-mexico-reforms/mexican-congress-passes-radical-shakeup-of-oil-industry-idUSBRE9BC02T20131213.
42
Aaron Heslehurst, Mexican MP strips off clothes in protest at energy decision, BBC, December 13, 2013,
available at https://www.bbc.com/news/av/world-latin-america-25365314/mexican-mp-strips-off-inprotest-at-energy-decision.
43
Graham, Reuters, Dec. 12, 2013.
44
Charlie Rose, Larry Fink: Luis Videgaray, Charlie Rose, February 11, 2014, available at
https://charlierose.com/videos/26180.

10

 [T]he reforms that President Nieto has done is going to – if the reforms are
executed properly, Mexico will become a juggernaut in energy.
Despite the Mexican President’s promises and BlackRock’s forecasts, Mexico’s GDP
growth rate has actually continued on a downward trend since the energy reform passage
in late 2013.45 While private actors tied to BlackRock have benefitted handsomely, the
Mexican economy has not experienced the dramatic 5% GDP growth as predicted by
BlackRock’s Landers.

The same week as Videgaray’s and Fink’s Charlie Rose appearance, Time Magazine
wrote a glowing profile of the President for its February 24th international edition with
the obsequious cover headline “Saving Mexico.” 46
The article described the President as passing the “most
ambitious package of social, political and economic reforms
in memory” and opening Mexican oil reserves to foreign
investment. The “smart money has begun to bet on peso
power” the article crowed. The author of the piece, Michael
Crowley, also noted that Peña Nieto was assisted by a group
of young technocrats including Videgaray and Emilio
Lozoya Austin, the new CEO of PEMEX who had been a
key campaign advisor to the President.
The international cover caused uproar in Mexico as Mexican
citizens swarmed social media to slam Time and Crowley for
what they viewed as U.S. glorification of energy reforms that sold Mexico’s sovereignty
in potentially corrupt deals. 47 The pushback was so intense that many believed both Time
45

Trading Economics, Mexico GDP Annual Growth Rate 1994-2018, available at
https://tradingeconomics.com/mexico/gdp-growth-annual.
46
Michael Crowley, Mexico’s New Mission, Time Magazine, February 24, 2014, available at
https://content.time.com/time/magazine/article/0,9171,2165465-1,00.html.
47
Brenda Colon Navar, Outrage and disbelief in Mexico over latest cover of Time, San Diego Red,
February 14, 2014, available at http://www.sandiegored.com/en/news/77687/Outrage-and-disbelief-inMexico-over-latest-cover-of-TIME.

11

 and Crowley must have taken bribes – a conspiracy that was given additional legs given
BlackRock’s purchase of an almost 6% stake in Time Inc.’s parent company Time
Warner in late December 2013.48

BlackRock’s support of Peña Nieto reforms pays off with major PEMEX deals
On June 30, 2014 a consortium led by Odebrecht Infrastructure Latin America won a
major contract with PEMEX subsidiary TAG Pipelines to build a 450 km natural gas
pipeline in eastern central Mexico called Los Ramones II. The pipeline construction
would traverse the Sierra Madre Mountains and run through the states of Nuevo Leon,
Tamaulipas and San Luis Potosi when completed.49 A year later, Odebrecht would be the
subject of a global bribery and bid-rigging scandal enveloping 11 different Latin
American countries including Mexico.50
On March 26, 2015, PEMEX, BlackRock and energy private equity firm First Reserve,
signed a major agreement to finance the construction of Los Ramones II. 51 The
agreement was the first of many public private partnerships between BlackRock and the
Peña Nieto administration for infrastructure financing.
According to El Universal columnist Mario Maldonado, PEMEX CEO Emilio Lozoya
Austin was tasked with approaching and presenting investment proposals to BlackRock.52
48

BlackRock Inc., SEC Schedule 13G Form, January 17, 2014, available at
https://www.sec.gov/Archives/edgar/data/1105705/000108636414002038/time.warner.inc..txt.
49
Press Release, In Mexico, Odebrecht Infrastructure – Latin America Establishes Contract to Build the
Los Ramones II North Gas Pipeline, Odebrecht, July 3, 2014, available at
https://www.odebrecht.com/en/mexico-odebrecht-infrastructure-latin-america-establishes-contract-buildlos-ramones-ii-north-gas.
50
Daniel Gallas, Odebrecht: Brazilian construction giant in the crosshairs, BBC, August 3, 2015, available
at https://www.bbc.com/news/world-latin-america-33718954; Odebrecht case: Politicians worldwide
suspected in bribery scandal, BBC, December 15, 2017, available at https://www.bbc.com/news/worldlatin-america-41109132.
51
Press Release, BlackRock, First Reserve to Acquire Equity Stakes in PEMEX’s Los Ramones II Gas
Pipeline Projects in Mexico, BlackRock and First Reserve, March 26, 2015, available at
https://www.businesswire.com/news/home/20150326006520/en/BlackRock-Reserve-Acquire-EquityStakes-PEMEX%E2%80%99s-Los; Press Release, Pemex signs deal with BlackRock and First Reserve,
PEMEX, March 26, 2015, available at
http://www.pemex.com/en/press_room/press_releases/Paginas/2015-027-national.aspx.
52
(Spanish) Mario Maldonado, La conexion Pemex-BlackRock, El Universal, June 23, 2016, available at
http://www.eluniversal.com.mx/entrada-de-opinion/columna/mario-maldonado/cartera/2016/06/23/laconexion-pemex-blackrock

12

 In exchange for providing 45% of the financing (approximately US $900 million),
BlackRock and First Reserve negotiated a 25-year gas transportation agreement with
PEMEX for the pipeline project.53
BlackRock’s head of Latin America, Armando Senra underscored the importance of the
contract to the company’s pension management business: “When you look at the main
needs of our clients globally – including pension plans, insurance companies and
sovereign wealth funds – they’re looking for long-term investments,” Senra said. “So
building our infrastructure platform is a priority for the firm.”

PEMEX/BlackRock Signing Ceremony for Los Ramones II Pipeline

At a signing ceremony with PEMEX CEO Lozoya Austin, BlackRock’s Infrastructure
Investment Group CEO Jim Barry praised the country’s energy reforms, promising
“investment opportunities in Mexican infrastructure have definitely drawn our attention
and we hope to explore other opportunities in the near future.”54
Those opportunities came a little over two months later on June 1st, when BlackRock’s
Barry and PEMEX signed a memorandum of understanding to accelerate the
development and financing of energy infrastructure projects.55 Under the agreement,
BlackRock committed to provide industry expertise, risk management capabilities and
sources of financing for new infrastructure projects.56
On October 30, 2015, BlackRock and PEMEX made news again, this time jointly
investing US $700 million in a fuel transport project in Mexico’s central gulf that
included the construction of two petrol and diesel unloading stations at the port of
53

Laurence Iliff, Mexico’s Pemex lands pipeline deal with BlackRock, First Reserve, The Wall Street
Journal, March 26, 2015, available at https://www.wsj.com/articles/mexicos-pemex-lands-pipeline-dealwith-blackrock-first-reserve-1427405627.
54
Press Release, PEMEX, March 26, 2015.
55
(Spanish) Pemex y BlackRock firman acuerdo de inversion en infraestructura, Forbes, June 1, 2015,
available at https://www.forbes.com.mx/pemex-y-blackrock-firman-acuerdo-de-inversion-eninfraestructura/.
56
Press Release, Pemex and BlackRock sign Memorandum of Understanding to Develop Energy Related
Infrastructure in Mexico, PEMEX and BlackRock, June 1, 2015, available at
https://www.businesswire.com/news/home/20150601006186/en/Pemex-BlackRock-sign-MemorandumUnderstanding-Develop-Energy.

13

 Tuxpan in the state of Veracruz.57 The stations would connect to a 318km pipeline
system to transport fuel to storage and distribution terminals in the central region of
Mexico.
In just seven months, BlackRock and PEMEX closed over US $1 billion in new energy
infrastructure projects with agreements between the two to arrange financing for
additional energy infrastructure projects in the future. But even as the ink was drying on
BlackRock’s energy infrastructure deals, PEMEX was becoming increasingly embroiled
in charges of gross mismanagement, corruption, fraud and allegations of bribery –
charges that would ultimately engulf its CEO and roil the Peña Nieto administration.
BlackRock’s partner PEMEX -Embroiled in scandal
Named as PEMEX CEO in December 2012, Lozoya Austin appeared to have the perfect
pedigree for the new PRI technocrats in the Peña Nieto administration.58 A graduate from
Harvard with a Master’s in Public Administration and International Development, the
President’s former campaign aide was the Director for Latin America at the World
Economic Forum until 2009 and included as one of the 10 leaders with the most
influence on the President.59
His three-and-a-half-year leadership of PEMEX however was largely seen as a disaster.
By 2015, PEMEX’s already poor financial performance showed cratering operating
losses of $38.5 billion – the worst losses in over 80 years.60
Despite the mounting losses, the number of senior managers on the PEMEX payroll
tripled. According to Wolf Street, senior executives under Lozoya Austin repeatedly
awarded themselves generous salary increases and lucrative perks including three
executive airplanes, a helicopter and over 900 company cars and SUVs.61 Lozoya himself
was said to have a personal chef and a sommelier at his disposal.62

57

Adam Critchley, Pemex embarks on Gulf-Central fuel distribution plan, BNAmericas. October 30, 2015,
available at http://www.bnamericas.com/en/news/oilandgas/pemex-embarks-on-gulf-central-fueldistribution-plan.
58
(Spanish) Coldwell da posesion a Lozoya como director de Pemex, Noticeros Televisa, December 3,
2012, available at http://noticierostelevisa.esmas.com/nacional/532910/coldwell-da-posesion-lozoyadirector-pemex/.
59
Xico, Energy Reform in Mexico: Who’s Who, Bakirita Blog, June 1, 2014, available at
http://bakirita.blogs.com/xico/2014/06/energy-reform-images-.html;
https://www.weforum.org/about/alumni.
60
Don Quijones, How did things get this bad this fast for oil giant Pemex? Wolf Street, August 27, 2017,
available at https://wolfstreet.com/2017/08/27/how-did-it-get-this-bad-for-mexico-oil-giant-pemexcorruption/.
61
Quijones, Wolf Street, August 27, 2017.
62
(Spanish) Camilo Olarte, Emilio Lozoya, en problemas?... Conozca las razones de la improbable caída
del ex "mirrey" de Pemex, America Economica, January 10, 2018, available at
https://www.americaeconomia.com/politica-sociedad/politica/emilio-lozoya-en-problemas-conozca-lasrazones-de-la-improbable-caida-del.

14

 A 2017 Proceso investigation reported that the planes and helicopters, specifically
requested by Lozoya Austin to help patrol and combat oil theft around PEMEX’s major
pipelines were instead deployed to shuttle the CEO and his PEMEX colleagues to luxury
resorts in Mexico and the U.S. at the expense of Mexican taxpayers.63 Mexico’s office of
oversight for public funds (the Audit Superior Office or “ASF”) reported in 2015 that the
company spent over $30 million on helicopter and plane flights alone and that Lozoya
Austin made 727 helicopter flights, an average of two daily, while CEO.64
But it was the persistent allegations of bribery that
ultimately led to his undoing. In August 2017, the
anti-corruption group Mexicans Against
Corruption and Impunity (Mexicanos Contra la
Corrupción y la Impunidad or MCCI) alleged that
Lozoya Austin accepted more than $10 million in
bribes from Odebrecht officials in 2012 during his
time as a top campaign aide to Peña Nieto and
later as CEO of PEMEX.65
A June 2018 New York Times story reported that Lozoya Austin requested another $5
million bribery payment from a top Odebrecht official in 2014. It’s unclear whether the
payment allegations were related to the Odebrecht contract for Los Ramones II.
According to MCCI and the New York Times, the Odebrecht payments were allegedly
passed through shell companies in the British Virgin Islands before landing in accounts
controlled by the PEMEX CEO in Switzerland, Liechtenstein, and Monaco.66
Lozoya Austin was allegedly involved in other corruption scandals as well. In August
2017, Mexico’s Secretariat of Public Function opened an investigation into allegations
that during his time at PEMEX, Lozoya Austin may have also used his position of
influence to lobby the federal government to award concessions and projects to OHL
Mexico, an infrastructure company in which he had previously served as a board
member.67

63

(Spanish) Jesusa Cervantes, Pifias y despilafarros en Pemex, Proceso, August 19, 2017, available at
https://www.proceso.com.mx/499702/pifias-despilfarros-en-pemex; Quijones, How did it get this bad for
Mexico oil giant Pemex, Wolf Street, August 27, 2017, available at https://wolfstreet.com/2017/08/27/howdid-it-get-this-bad-for-mexico-oil-giant-pemex-corruption/
64
(Spanish) Olarte, America Economica, Jan. 10, 2018.
65
(Spanish) Raul Olmos, En el marco de la campana presidencial de 2012, asi fueron los depositos a
presuntas cuentas del priista Emilio Lozoya, Mexicanos Contra la Corrupción y la Impunidad , August 14,
2017, available at https://contralacorrupcion.mx/odebrecht-lozoya/.
66
Azam Ahmed, Mexico could press bribery charges. It just hasn’t, The New York Times, June 11, 2018,
available at, https://www.nytimes.com/2018/06/11/world/americas/mexico-odebrecht-investigation.html;
Quijones, Wolf Street, August 27, 2017.
67
(Spanish) SFP abrio investigacion contra Emilio Lozoya por dar ‘felicidades’ a OHL en Pemex, Aristegui
Noticias, August 15, 2017, available at https://aristeguinoticias.com/1508/mexico/sfp-abrio-investigacioncontra-emilio-lozoya-por-dar-facilidades-a-ohl-en-pemex/.

15

 Audio recordings purportedly showed influence peddling in which the PEMEX CEO and
government officials agreed to issue tenders for road and energy concessions in ways that
favored OHL Mexico according to media reports.68
To be sure, BlackRock has not been the subject of any allegations of bribery. However,
the fact that bribery has long been part of the contracting culture in Mexico, and the
company’s numerous business deals with PEMEX, a company facing numerous
allegations of bribery itself, raises serious questions about its judgment.
BlackRock Invests in Sierra Oil and Gas One Month Before Winning Major PEMEX
Contract
BlackRock aggressively courted PEMEX to capitalize on infrastructure financing deals
made possible by Peña Nieto’s 2012 energy reforms, but its biggest PEMEX payoff
would occur in mid-2015.
On September 18, 2014, Sierra Oil and Gas, Mexico’s first independent oil exploration
and production company, announced it had secured US $525 million in equity
commitments to participate in oil exploration, development and production made possible
by the 2013 energy reform package.69
Infraestructura Institucional (aka “I2” or “I Cuadrada”), Mexico’s largest infrastructure
private equity firm, committed $75 million to the project as one of three private equity
investors.
For any big equity player looking to participate in Mexico’s infrastructure boom, I
Cuadrada would be an enticing target. But the company had something else that
BlackRock in particular, also greatly coveted: Access to Mexican workers’ pensions to
help fund infrastructure projects. As I Cuadrada’s Juan Alberto Leautaud explained
when he announced his company’s Sierra investment, “For us in I2, the investment in
Sierra represents an important opportunity for Mexico’s institutional capital, particularly
the pension funds (Afores) that invest in our Development Capital Certificates (CKD’s),
to help finance the development of the nascent Mexican private energy sector.”70
On June 12, 2015, less than a year after Sierra Oil and Gas’ financing agreement with I
Cuadrada, BlackRock pounced, buying I Cuadrada for US $71 million.71 BlackRock’s
68

(Spanish) Rodrigo Gonzalez Gutierrez, Emilio Lozoya y sus turbias relaciones con OHL, La Silla Rota,
August 15, 2017, available at https://lasillarota.com/nacion/emilio-lozoya-y-sus-turbias-relaciones-conohl-emilio-lozoya-ohl-cfe-pemex/170160.
69
Press Release, Sierra Oil & Gas Announces Commitment of US$525 million, Sierra Oil & Gas S. de R.L.
de C.V., September 18, 2014, available at https://www.prnewswire.com/news-releases/sierra-oil--gasannounces-commitment-of-us525-million-275624601.html.
70
Press Release, Sierra Oil & Gas S. de R.L. de C.V., September 18, 2014.
71
Christine Murray, BlackRock to buy Mexican fund tied to scandal-hit contractor, Reuters, June 12, 2015,
available at https://www.reuters.com/article/us-blackrock-mexico/blackrock-to-buy-mexican-fund-tied-toscandal-hit-contractor-idUSKBN0OS1PJ20150612.

16

 timing was impeccable: On July 15th, only a month after BlackRock’s I Cuadrada
acquisition, Sierra – a company that had never even drilled an oil well – won the only bid
in the first round of contracts put out to tender to private firms.72
BlackRock Announces Another Partnership With PEMEX
Two weeks later, PEMEX and BlackRock announced yet another partnership,
establishing a new joint office for project management on July 29th.73
Heavily redacted minutes of the PEMEX
board discussion about the BlackRock
partnership show that the deal was proposed in
order to finance projects, that because of their
financial complexity, size and structuring,
required third party investors like BlackRock
as project anchors.

Redacted PEMEX board minutes discussing
BlackRock joint partnership

José Manuel Carrera Panizzo, a director of
PEMEX subsidiary PMI Comercio, proposed
the partnership and spoke in favor of the
PEMEX-BlackRock alliance according to the
board minutes. Carrera Panizzo would later be
the subject of investigations in the online
publication Contralinea, alleging that the
PEMEX director was involved in the activities
of the company through a network of portfolio
companies that lacked offices and employees
and were located in tax havens such as
Ireland, Switzerland, Holland, Panama, and
Singapore.74 According to the investigations,

72

Staff Reporters, Mexico Awards First Oil Block In History To Sierra Oil And Gas, Mexico Infrastructure
Finance and Business Review, July 15, 2015, available at
http://mexicoinfrastructureprojects.com/2015/07/mexico-awards-first-oil-block-in-history-to-sierra-oil-andgas/; Adam Critchley, Mexico’s ‘round zero’ and ‘round one’ explained, BNamericas, September 24, 2014,
available at
http://www.bnamericas.com/en/features/oilandgas/mexicos-round-zero-and-round-one-explained;
Bloomberg, Round One Winner Sierra Oil & Gas Has US$525 Million Total Backing, Oil and Gas
Investor, July 17, 2015, available at https://www.oilandgasinvestor.com/round-one-winner-sierra-oil-gashas-us525-million-total-backing-810416#p=full.
73
(Spanish) PEMEX, Board of Directors Minutes, Page 19, July 29, 2015, available at
http://www.pemex.com/acerca/gobiernocorporativo/consejo/Documents/acuerdos_2015/acta_895_ord_vp.pdf.
74
(Spanish) Nancy Flores, Pemex creo 37 empresas en paraisos fiscales, Contralinea, April 24, 2016,
available at https://www.contralinea.com.mx/archivo-revista/2016/04/24/pemex-creo-37-empresas-enparaisos-fiscales/; (Spanish)
Nancy Flores, Pemex sustituye a Carrera Panizzo, promotor de ‘negocios’ en paraisos fiscales, Contralinea.
June 26, 2017, available at https://www.contralinea.com.mx/archivo-revista/2017/06/26/pemex-sustituyea-carrera-panizzo-promotor-de-negocios-en-paraisos-fiscales/.

17

 PEMEX turned to the Panamanian firm of Mossack Fonseca to help develop the intricate
business structures for PEMEX subsidiaries.
A 2018 Huffington Post investigation alleged that PEMEX had concealed more than $4
billion in earnings from the private subsidiaries abroad that made up Grupo PMI during
Peña Nieto’s six-year term.75 In 2014, PEMEX received $509 million in revenue from
PMI Trading Ltd. based in Ireland according to the report. The 2014 financial statements
for PMI trading included the signature of Carrera Panizzo.
After the PEMEX board meeting approving the BlackRock partnership, President Peña
Nieto hosted a celebratory dinner for Fink and BlackRock’s board of directors at
Mexico’s National Palace. Secretary of Finance Luis Videgaray and Mexico’s Secretary
of Foreign Affairs José Antonio Meade also attended the dinner.76

Fink praised Peña Nieto for his economic reforms and, sounding more like a U.S.
Ambassador than a corporate CEO, promised that BlackRock wanted a long-term
relationship with Mexico: “We should as a country turn our eyes towards Mexico,” Fink
said. “BlackRock is taking a long-term view towards Mexico with PEMEX infrastructure
projects that will help Mexico’s economic efficiency, reduce costs and, more importantly,
improve the lives of all Mexicans.”77
BlackRock’s I Cuadrada acquisition plagued by questions of corruption

75

(Spanish) Manuel Hernandez Borbolla, Pemex oculta ganancias por más de 4 mil mdd de sus filiales
privadas en el extranjero, durante el sexenio de Peña, HuffPost, February 14, 2018, available at
https://www.huffingtonpost.com.mx/2018/02/13/pemex-oculta-ganancias-por-mas-de-4-mil-millones-deusd-mediante-filiales-privadas-en-el-extranjero-durante-sexenio-de-pena_a_23356736/.
76
(Spanish) Eduardo Ortega, Reformas desatarán el verdadero potencial de México: BlackRock, El
Financiero, July 29, 2015, available at http://www.elfinanciero.com.mx/economia/reformas-desataran-elverdadero-potencial-de-mexico-blackrock.
77
Ortega, El Financiero, Jul. 29, 2015.

18

 Like BlackRock’s energy partnerships with the notoriously corrupt PEMEX, the
company’s acquisition of I Cuadrada came with its own set of thorny questions regarding
corruption, influence peddling and conflict of interest allegations.
Government watchdogs and the President-elect Andrés Manuel López Obrador raised
questions at the time about the PEMEX award to Sierra Oil and Gas, noting that one of
Sierra’s three investors, I Cuadrada, was founded by Jerónimo Marcos Gerard Rivero,
a politically influential businessman and the brother-in-law and key advisor to former
President Carlos Salinas de Gortari.78
López Obrador, or “AMLO” as he is frequently referred to in Mexico’s media, also
questioned the suspicious timing of the I Cuadrada sale to BlackRock only a month
before the Sierra award: “In the process of bidding for the oil fields, supposedly this
company [I Cuadrada] was sold to a BlackRock investment fund in the style of the white
collar financial mafia,” AMLO wrote on his Facebook page, promising that if elected in
2018, he would revoke contracts “tainted by influence and corruption.”79
Another critic of the Sierra award, Armando Dorantes Cabrera with the National
Committee for Energy Studies (CNEE) complained that the award of Round One
contracts showed the involvement of “former directors of PEMEX, relatives of
politicians, and companies without experience in the oil industry accused of corruption,
mismanagement and complaints against them all over the world.” 80
Dorantes Cabrera said that the award to Sierra was especially curious given that the
company had only been founded the year before in 2014. According to Dorantes Cabrera,
President Peña Nieto had assured the public that participating companies would have
extensive experience in the oil and gas industry.
Then there was the matter of I Cuadrada’s other business partners. According to a June
2015 Reuters story announcing BlackRock’s I Cuadrada acquisition, at least two of the
infrastructure projects listed in I Cuadrada’s quarterly filings (a new hospital in the city of
Zumpango and a toll road between Toluca and Naucalpan -- both in Peña Nieto’s home
state of Mexico) were built by companies owned by Juan Armando Hinojosa, a
contractor at the center of influence-peddling allegations that roiled the Peña Nieto
Administration in late 2014.81
78

(Spanish) Jesusa Cervantes, Francisco Gil Díaz y Jerónimo Gerard: el poder de la información
privilegiada, Proceso, September 15, 2016, available at https://www.proceso.com.mx/455033/franciscogil-diaz-jeronimo-gerard-poder-la-informacion-privilegiada; (Spanish) Acusa AMLO que cuñado de
Salinas se benefició con licitación de Ronda Uno, SDPnoticias.com, July 16, 2015, available at
https://www.sdpnoticias.com/nacional/2015/07/16/acusa-amlo-que-cunado-de-salinas-se-beneficio-conlicitacion-de-ronda-uno.
79
SDPnoticias.com, Jul. 16, 2015.
80
(Spanish) Armando Guzman, Denuncian “turbias” asignaciones a empresas vinculadas a Salinas y
González Anaya en Tabasco, Proceso, August 1, 2017, available at
https://www.proceso.com.mx/497149/denuncian-turbias-asignaciones-a-empresas-vinculadas-a-salinasgonzalez-anaya-en-tabasco.
81
Christine Murray, BlackRock to buy Mexican fund tied to scandal-hit contractor, Reuters, June 12, 2015,
available at https://www.reuters.com/article/us-blackrock-mexico/blackrock-to-buy-mexican-fund-tied-to-

19

 One allegation concerned the sale and
financing of a home by Hinojosa to Mexico’s
Finance Minister Luis Videgaray in an
exclusive golf resort near Malinalco at what
some said were interest rates 60% below
market rates. A second allegation related to
the sale of a $7 million mansion in Mexico
City to Angelica Rivera, President Peña
I Cuadrada contractor Juan Armondo
Nieto’s wife and Mexico’s first lady.82 In
Hinojosa
November 2014, a team of Mexican
investigative journalists reported that a Hinojosa-owned company built the property,
described as the presidential family mansion, and still held title to the home.83
The deals were especially galling to anti-corruption watchdogs given that Hinojosa –
close friends with both the President and his finance minister and dubbed the “duke of
privilege” by the media – had received almost 100 public contracts since 2005, when
Peña Nieto became governor of the State of Mexico.84 Since 2005, Hinojosa’s
companies, organized in a conglomeration known as Grupo Higa, had been awarded
contracts valued at close to 60 billion pesos (approximately $3.5 billion) according to a
Congressional investigation.85
A 2016 McClatchy investigation based on information uncovered from the release of the
Panama Papers found that Hinojosa also sought to conceal his substantial wealth through
an elaborate and complex chain of offshore trusts and investment accounts that stretched
from the Netherlands to Britain, New Zealand, Panama, Germany and New York.86
While the I Cuadrada acquisition didn’t directly implicate BlackRock in wrongdoing, the
acquired company’s close association with contractors and business partners tied directly
to corruption scandals roiling the Peña Nieto administration further tarnished the
infrastructure company’s image. Moreover, according to Reuters, BlackRock’s purchase
of I Cuadrada’s infrastructure fund had now made it a direct partner with Hinojosa in at
least one of the projects, the Zumpango hospital.87
scandal-hit-contractor-idUSKBN0OS1PJ20150612; (Spanish) Reuters, I2, filial de BlackRock, compra
50% de un hospital en Estado de México, Investing.com, September 14, 2016, available at
https://mx.investing.com/news/world-news/i2,-filial-de-blackrock,-compra-50-de-un-hospital-en-estado-deméxico-96984.
82
Tim Johnson, A well-connected Mexican tycoon stashes a fortune overseas, McClatchy DC Bureau,
April 3, 2016, available at https://www.mcclatchydc.com/news/nationworld/national/article69729372.html; Juan Montes, Mexico Finance Minister Bought House From
Government Contractor, The Wall Street Journal, December 11, 2014, available at
https://www.wsj.com/articles/new-ties-emerge-between-mexico-government-and-builder-1418344492.
83
Tracy Wilkinson, Report says Mexico leader was given mansion by train entrepreneur, Los Angeles
Times, November 9, 2014, available at http://www.latimes.com/world/mexico-americas/la-fg-mexicomansion-20141110-story.html.
84
Johnson, McClatchy DC Bureau, Apr. 3, 2016.
85
Id.
86
Id.
87
Murray, Reuters, Jun. 12, 2015.

20

 BlackRock’s infrastructure contractors – more corruption, bribery, conflicts of
interest, and project mismanagement
A review of filings posted to Mexico’s infrastructure and investment website “Mexico
Projects Hub” shows that as of July 2018, most of the management team of I Cuadrada,
including Gerard Rivero and Juan Alberto Leautaud, appear to now work for BlackRock
and are listed today as “key people or management team.” The group also manages at
least two BlackRock “CKD” securities for Mexican pension funds (BlackRock Mexico
Infraestructura I and BlackRock Mexico Infraestructura II) with investments totaling
more than 7.4 billion pesos (approximately $382 million). 88
The investments include various Mexican infrastructure assets including the original I
Cuadrada investment in Sierra Oil & Gas, the Los Ramones pipeline, an offshore drilling
platform, toll roads, a hospital in Mexico state, and a prison in Coahuilla state among
others.
Several of the BlackRock investments also include projects linked to contractors
implicated in their own corruption, conflict of interest, bribery and project
mismanagement scandals according to publicly available information.
Private Prison Project

After billions of pesos in taxpayer funds,
Coahuilla prison stood empty

In 2017 for instance, Reuters reported that more
than 2.5 billion pesos of taxpayer funds had been
largely wasted on Coahuila’s Ramos Arizpe
prison and another prison in Papantla that stood
idle and empty.89 Part of I Cuadrada’s portfolio of
infrastructure projects acquired by BlackRock, the
Ramos Arizpe prison privatization scheme was
funded with Mexican pension fund resources in
exchange for a 20-year contract to build the
facility and then provide key services like food,

laundry and toiletries.
Despite Mexico’s prison minister describing the contractor, Grupo Tradeco as a
“disaster” for missing construction deadlines, records showed that the Peña Nieto
Administration inexplicably increased construction payments to the contractor by 18
percent just before BlackRock bought the project.

88

http://www.proyectosmexico.gob.mx/wp-content/uploads/2017/03/ICUA2CK14e.pdf;
http://www.proyectosmexico.gob.mx/wp-content/uploads/2017/03/ICUADCK10e.pdf.
89
Christine Murray, Joanna Zuckerman Bernstein, After drug war contracting boom, Mexican prisons stand
idle, Reuters, February 17, 2017, available at https://www.reuters.com/article/us-mexico-prisons/afterdrug-war-contracting-boom-mexican-prisons-stand-idle-idUSKBN15W0FJ.

21

 According to Reuters, the additional payments added billions of pesos in additional cost
to taxpayers over 20 years and created an “additional burden on a federal budget
depressed by low oil prices.” Asked about the pay increases at the time, BlackRock
refused to comment.90
In early 2015, a group of legislators from Mexico’s Institutional Revolutionary Party
(PRI) called for an investigation of Grupo Tradeco alleging that numerous infrastructure
projects carried out by the company, including the construction of bridges, highways and
other public works projects were plagued by cost overruns and other irregularities.91
In the U.S. as well, Grupo Tradeco has experienced problems delivering on its
infrastructure commitments. In June 2015, Tradeco Infrastructure, a Grupo Tradeco
subsidiary, walked off a major highway construction job in El Paso after Ranger
Offshore, a Houston-based company filed a lawsuit seeking to collect almost $20 million
it said it was owed from the company.92
Guerrero, Mexico Coal Transportation and Storage Project
In 2017, BlackRock Mexico Infrastructure II entered into a 14-year “Coal Transportation
& Storage Services Agreement” contract with Mexico’s state-owned electric utility, the
Comision Federal de Electricidad (CFE), to build, own and operate a coal transport and
storage system located in Michoacan and Guerrero, Mexico.93 As part of its deal with
CFE, BlackRock contracted with two construction firms, the Italian-Argentina
conglomerate Techint and the Spanish-based Duro Felguera, through a subsidiary
special purpose vehicle known as Greenfield SPV I, S.A.P.I de C.V. Both contractors
are facing numerous international investigations for allegations of money laundering,
bribery and corruption. 94
In April 2018, a joint investigation by Italy’s L’Espresso, Argentina’s Diario Perfil and
Brazil’s Poder360, claimed to have uncovered a massive web of offshore entities used by
Techint associates to bribe Brazilian state companies and move money through tax
90

Murray and Bernstein, Reuters, Feb. 17, 2017.
Peter de Montmollin, Mexico’s PRI calls for investigation of contracts awarded by prior administrations,
BNamericas, February 5, 2015, available at http://www.bnamericas.com/en/news/infrastructure/mexicospri-calls-for-investigation-of-contracts-awarded-by-prior-administrations.
92
Marty Schladen, Contractor that walked off El Paso job was bonded, qualified, El Paso Times, June 16,
2015, available at https://www.elpasotimes.com/story/news/local/2015/06/16/contractor-that-walked-offep-job-was-bonded/71948938/.
93
Advising CitiBanamex on the financing of a project for the upgrade and expansion of port logistics
facilities, Nader Hayaux and Goebel, available at http://www.nhg.mx/en_gb/case/advising-citibanamexon-the-financing-of-a-project-for-the-upgrade-and-expansion-of-port-logistics-and-fuel-transportationfacilities-at-the-lazaro-cardenas-port/.
94
Press Release, Techint E&C Increases the Transport of Coal from the President Plutarco Elías Calles
Thermoelectric Plant in Mexico, Techint, available at http://www.techint-ingenieria.com/en/news/techintec-increases-transport-coal-president-plutarco-elias-calles-thermoelectric-plant-mexico; (Spanish) Ingrid
Rojas, Citigroup, Citibanamex y Citibank otorgan préstamo a Greenfield por USD 347 millones con apoyo
de cuatro bufetes, Lex Latin, December 13, 2017, available at http://lexlatin.com/noticia/citigroupcitibanamex-citibank-otorgan-prestamo-greenfield-usd-347-millones.
91

22

 havens across the globe. In one case, a Techint subsidiary was accused of paying $9.4
million in bribes to Brazil’s state-owned oil company Petrobas, some of which was
allegedly used to secure contracts and pay off a member of Brazilian president Lula da
Silva’s cabinet.95
In 2016, an investigation by Spain’s El Pais uncovered possible multi-million dollar
“commissions” paid by Duro Felguera to former high-level Venezuelan political officials
in exchange for public contracts to build power plants in that country.96
Mexican Toll Roads and Highways
BlackRock’s infrastructure investments in toll roads and highways through its acquisition
of I Cuadrada have come under scrutiny as well. Grupo Higa’s contract with I Cuadrada
to build the Toluca-Naucalpan toll road in particular was both severely over budget and
repeatedly marred by conflict and legal battles over claims that the land belonged to the
Otomi indigenous community.97
Specifically, the Otomi claimed that
construction threatened to destroy
sections of the Bosque Otomi-Mexica
natural reserve, considered sacred land
to the Otomi people.98 After years of
demonstrations, President Peña Nieto
signed an executive order in July 2015
– less than a month after BlackRock
acquired I Cuadrada – expropriating 91
acres of land so the road construction
could continue. The highway, which was originally expected to cost $132 million,
ballooned to over $207 million according to the New York Times.99
BlackRock has also invested Mexican pension fund resources in two other toll road
projects through CKD’s -- the Autopistas de Tapachula (ATAP) and Concesionaria de
Autopistas de Michoacan (CAMSA).100 Such toll road investments have become popular
(and controversial) examples of public private partnerships that typically involve
95

Scilla Alecci, ‘Kings of Steel’ pinballed by new Panama and Paradise Papers probe, ICIJ, April 24, 2018,
available at https://www.icij.org/blog/2018/04/kings-steel-pinballed-new-panama-paradise-papers-probe/.
96
Jose Antonio Hernandez, Report: Chavista officials may be involved in money laundering scandal, El
Pais, September 30, 2016, available at
https://elpais.com/elpais/2015/03/21/inenglish/1426895310_889699.html.
97
Paulina Villegas and Frances Robles, Deals Flow to Contractor Tied to Mexican President, The New York
Times, July 30, 2015, available at https://www.nytimes.com/2015/07/31/world/americas/mexicanpresidents-ties-to-contractor-raise-questions.html.
98
https://dorsetchiapassolidarity.wordpress.com/tag/highway/; https://www.businesshumanrights.org/en/mexico-indigenous-communities-resisting-highway-construction-accuse-police-grupohiga-of-illegally-destroying-their-property-displacing-them
99
Villegas and Robles, The New York Times, July 30, 2015.
100
http://www.proyectosmexico.gob.mx/wp-content/uploads/2017/03/ICUA2CK14e.pdf;
http://www.proyectosmexico.gob.mx/wp-content/uploads/2017/03/ICUADCK10e.pdf

23

 financing the construction and management of the new highways in exchange for service
agreements allowing investors to recoup their investment through toll revenue over a
specified period of time.101
While the projects may be popular with investors, they are often a disaster for those
forced to use the privately funded highways. Indiana University professor Micol Seigel
found that Mexico’s massive highway construction projects, largely funded through
public-private partnerships in the 1980s, resulted in some of the costliest toll roads in the
world – so costly in fact, that ordinary Mexicans could not afford to use the roads.102
Approximately 25 toll roads were eventually re-nationalized at a cost of almost $8
billion, according to Siegel. Moreover, the Mexican government was forced to step in and
raid the public treasury to compensate private companies for their expected losses in the
re-nationalization scheme. Mexico’s foreign minister Jorge Castañeda was forced to
conclude that the privatization of Mexican toll roads was a “dumb idea that didn’t work.”
PEMEX hires two key executives with deep BlackRock connections
On February 8, 2016, Emilio Lozoya Austin’s reign as CEO of PEMEX came to an
end.103 After the company’s worst quarterly result in history – a $10.2 billion loss, and 12
straight quarterly losses, the scandal-plagued parastatal named Jose Antonio Gonzalez
Anaya as its new CEO.104 A former director of the Mexican Institute of Social Security
(IMSS) with expertise in pensions and retirement issues, the new PEMEX CEO was
likely considered an ideal choice for a company like BlackRock looking to expand its
financing of oil and gas projects with Mexican pension fund money. 105 BlackRock would
have been pleased with new CEO choice for another reason as well: Gonzalez Anaya was
the brother-in-law of I Cuadrada’s founder, Jerónimo Marcos Gerard Rivero, now a key
member of BlackRock’s investment team and technical committee.106
101

Tom Groenfeldt, ‘Blended Finance’ – Lipstick On The Public-Private Partnership Pig?, Forbes, April
20, 2018, available at https://www.forbes.com/sites/tomgroenfeldt/2018/04/20/blended-finance-lipstick-onthe-public-private-partnership-pig/#2fdef854452b.
102
Micol Seigel, Privatization in Mexico is a road to nowhere, Quartz, August 9, 2013, available at
https://qz.com/113017/privatization-in-mexico-is-a-road-to-nowhere/.
103
Elisabeth Malkin, Chief of Pemex, Mexican Energy Giant, Steps Aside, The New York Times, February
8, 2016, available at https://www.nytimes.com/2016/02/09/business/energy-environment/chief-of-pemexmexican-energy-giant-steps-aside.html.
104
Adam Williams and Andrea Navarro, Pemex Reports Biggest Loss Ever as Oil Market Rout Cuts
Deeper, Bloomberg, October 28, 2015, available at https://www.bloomberg.com/news/articles/2015-1028/pemex-reports-12th-straight-loss-as-oil-price-batters-profits.
105
(Spanish) ¿Quién es 'Pepe Toño' González Anaya, el nuevo secretario de Hacienda?, El Financiero,
November 27, 2017, available at http://www.elfinanciero.com.mx/economia/quien-es-gonzalez-anaya-elnuevo-secretario-de-hacienda.
106
(Spanish) Arturo Rodriguez Garcia, Los cuñados de Carlos Salinas, ultraenriquecidos con Peña Nieto,
Proceso, June 6, 2015, available at https://www.proceso.com.mx/406673/406673-los-cunados-de-carlossalinas-ultraenriquecidos-con-pena-nieto; https://www.bmv.com.mx/docspub/infoanua/infoanua_756931_175992_2016_1.pdf (P. 87);
https://www.bmv.com.mx/docs-pub/infoanua/infoanua_756931_175992_2016_1.pdf (P. 100).

24

 Four months later on June 21st, BlackRock received more good news: PMI’s board of
directors named Isaac Volin, BlackRock’s former Mexico CEO as the new general
director of PEMEX subsidiary PMI Comercio Internacional.107 Created in 1989, the PMI
subsidiary trades crude oil and its derivatives, and is considered the main commercial arm
of PEMEX in the international market.108 As the new head of the company’s international
trading arm, Volin was Gonzalez Anaya’s second in command for all practical purposes
according to energy analyst S&P Global Platts.109 The publication also noted that neither
Gonzalez Anaya nor Volin had any previous experience in the oil business.
However, Volin did have experience with Mexico’s pension system as the former VP of
financial planning at CONSAR, another plus for BlackRock. AFORE records posted on
the government of Mexico’s website show that Volin served as a board member and a
member of the risk committee of AFORE XXI Banorte.110 In 2014, the pension fund
awarded a European equity mandate worth $1.2 billion to Schroders and BlackRock.111
PEMEX’s appointment of Volin was harshly criticized and condemned by Peña Nieto
opponents including Rocío Nahle García, a member of the Mexican Chamber of
Deputies from the National Regeneration Movement party (MORENA).112 On July 20th,
2016, Nahle García filed a petition with the Mexican Congress’ Permanent Commission
demanding that Volin be immediately removed from his new position at PMI Comercio
Internacional for conflicts of interest.113
The petition claimed that based on the restructuring of more than 27 PEMEX subsidiaries
that occurred during the administration of Salinas de Gortari (many now located
offshore), there had been “marked favoritism” for private sector companies like
BlackRock and McKinsey. The petition highlighted Volin’s previous work at McKinsey,
a company that provided advisory services to PEMEX during the Salinas de Gortari
107

(Spanish) Press Release, Isaac Volin, nuevo director general de P.M.I. Comercio Internacional, PEMEX,
June 21, 2016, available at http://www.pemex.com/saladeprensa/boletines_nacionales/Paginas/2016-044nacional.aspx.
108
(Spanish) Press Release, P.M.I. Comercio Internacional, Filial de Petróleos Mexicanos, comercializará
los hidrocarburos del Estado hasta 2017, Comisión Nacional de Hidrocarburos, December 15, 2016,
available at https://www.gob.mx/cnh/prensa/comunicado-de-prensa-026-emitido-por-la-cnh?idiom=es.
109
Ronald Buchanan, Preserving Pemex reforms in the post-Pena Nieto era of Mexico: Fuel for Thought,
S&P Global Platts, July 25, 2016, available at http://blogs.platts.com/2016/07/25/pemex-reforms-postPeña-nieto-mexico/.
110
https://www.gob.mx/cms/uploads/attachment/file/76812/COMITES_DE_RIESGOS_AFORES.pdf;
https://web.archive.org/web/20180703193742/https://www.gob.mx/cms/uploads/attachment/file/263647/C
onsejo_de_Administracio_n_201709.pdf;
https://www.gob.mx/cms/uploads/attachment/file/88856/Consejos_de_Administracion_Afores_201605.pdf
; https://www.gob.mx/cms/uploads/attachment/file/61333/2013_informe_anual.pdf (P. 28).
111
Atholl Simpson, Afore XXI Banorte increases Asia mandate to $850m and adds 3 new groups, Citywire,
March 14, 2017, available at http://citywireamericas.com/news/afore-xxi-banorte-increases-asia-mandateto-850m-and-adds-3-new-groups/a1000570.
112
https://translate.google.com/translate?hl=en&sl=es&u=https://lopezobrador.org.mx/rocionahle/&prev=search.
113
(Spanish) http://infosen.senado.gob.mx/sgsp/gaceta/63/1/2016-07-201/assets/documentos/PA_Morena_Conflicto_Pemex.pdf; (Spanish)
http://www.senado.gob.mx/index.php?ver=cp&mn=4&id=65373.

25

 administration as well as his previous CEO role at BlackRock Mexico, a company with
numerous PEMEX business relationships.
In its response to the complaint, the legislature found that it lacked the authority to hear
the issue since new anticorruption legislation went into effect just two days before on
July 18th that would determine the cases and circumstances under which public servants
could be sanctioned for corruption or conflicts of interest.114
On February 8, 2017, BlackRock expanded its energy infrastructure presence in Mexico
once more, announcing a deal to take ownership of First Reserve’s energy infrastructure
portfolio including First Reserve’s investment in the Los Ramones II pipeline as well as
investments in a low sulfur gasoline processing plant in Mexico and a wind farm in La
Bufa.115
Mark Florian, who had co-invested with BlackRock in the Los Ramones II pipeline deal
as part of the First Reserve team said, “Given our past work together and their success in
building out the Infrastructure platform, we believe that a transition to BlackRock can
provide the perfect place to take our energy infrastructure franchise to the next level.”116
Notably, Florian’s bio from a 2010 energy conference said that he had advised the state
of Indiana in 2006 in its $3.8 billion sale of the Indiana East West Toll Road. 117 That
transaction – a joint venture between Spanish construction firm Cintra and Australian toll
road company Macquarie Atlas Roads – ended in Chapter 11 bankruptcy in 2014, chilling
the climate for public private partnerships (PPP’s) in the U.S.118
BlackRock gears up for 2018 election: Meets with Meade, issues warnings on AMLO
A week after BlackRock’s First Reserve acquisition, Larry Fink met with Mexico’s
Finance Minister Jose Antonio Meade on February 14, 2017. The purpose of the
meeting according to El Financiero was to discuss BlackRock’s potential purchase of

114

(Spanish) http://infosen.senado.gob.mx/sgsp/gaceta/63/1/2016-08-311/assets/documentos/Dict_3ra_Consejo_PMI.pdf.
115
Mick Bowen, BlackRock takes ownership of First Reserve’s Mexican assets, Latin Finance, February 8,
2017, available at https://www.latinfinance.com/web-articles/2017/2/blackrock-takes-ownership-of-firstreserves-mexican-assets.
116
Press Release, BlackRock Acquires Energy Infrastructure Franchise from First Reserve, First Reserve,
February 1, 2017, available at https://www.firstreserve.com/news-articles/blackrock-acquires-energyinfrastructure-franchise-from-first-reserve.
117
http://www.aertc.org/conference2010/speakers/AEC%202010%20Session%202/2B%20Cleantech%20Fu
nding%20Lifecycle/Mark%20Florian/Mark%20Florian.html.
118
Robert Puentes, The Indiana Toll Road: How Did a Good Deal Go Bad?, Forbes, October 3, 2014,
available at https://www.forbes.com/sites/realspin/2014/10/03/the-indiana-toll-road-how-did-a-good-dealgo-bad/#2d8564ff2087; William J. Mallett, Indiana Toll Road Bankruptcy Chills Climate for Public-Private
Partnerships, CRS Insights, September 29, 2014, available at
https://web.archive.org/web/20151023093457/https://www.ncppp.org/wp-content/uploads/2013/02/CRSInsights-Indiana-Toll-Road-Bankruptcy-Chills-Climate-for-P3s.pdf.

26

 additional infrastructure assets from Mexico’s National Infrastructure Fund
(FONADIN).119
Meade, who had essentially swapped
Secretary slots with Luis Videgaray as
finance chief in September 2016 after
Videgaray’s unpopular decision to invite
Republican presidential candidate Donald
Trump to visit Mexico, said that significant
investments were planned for strategic
infrastructure projects scheduled for 2017
and 2018.120 He noted that BlackRock
through its past support of President Peña
Nieto’s development and implementation of structural reforms had demonstrated the
firm’s long-term commitment to Mexico.121
The timing of the meeting was significant: Mexico was once again gearing up for a
presidential election scheduled for 16 months later in July 2018. As a former secretary of
energy and finance in the cabinet of President Felipe Calderon as well as stints as finance
chief and secretary of foreign affairs in President Peña Nieto’s administration, Meade
was an enticing presidential candidate and BlackRock ally.122
Interestingly, Meade and Fink had a friendship that went back several years according to
the finance minister. The two had met previously several times in Mexico and New York
and had discussed Mexico’s economy frequently.123 Meade officially joined the
presidential race as Peña Nieto’s successor and PRI candidate on November 27, 2017.
The move resulted in yet another shuffle of Peña Nieto’s cabinet as PEMEX CEO
Gonzalez Anaya who had been in the job less than two years replaced Meade as Finance
Minister.124

119

(Spanish) BlackRock analiza participar en inversiones para infraestructura, El Financiero, February 14,
2017, available at http://www.elfinanciero.com.mx/economia/blackrock-analiza-participar-en-inversionespara-infraestructura.
120
Jean Luis Arce, Mexico’s New Finance Minister Spurns Donald Trump, Reuters, September 8, 2016,
available at https://www.reuters.com/article/us-usa-election-mexico/mexicos-new-finance-minister-spurnsdonald-trump-idUSKCN11E343.
121
(Spanish) Silvia Rodriguez, Hacienda impulsa inversiones para infraestructura, Milenio, February 14,
2017, available at http://www.milenio.com/negocios/hacienda-impulsa-inversiones-para-infraestructura.
122

https://www.bloomberg.com/research/stocks/private/person.asp?personId=118414012&privcapId=2697160
0.
123
(Spanish) Enrique Hernandez y Reuters, CEO de BlackRock se reune en privado con presidenciales, El
Sol de Mexico, May 8, 2018, available at https://www.elsoldemexico.com.mx/finanzas/ceo-de-blackrockse-reune-en-privado-con-presidenciales-1670154.html.
124
Adam Williams, Pemex CEO Becomes Mexico’s Finance Minister, Bloomberg, November 27, 2017,
available at https://www.bloomberg.com/news/articles/2017-11-27/pemex-revolving-door-turns-again-asceo-becomes-finance-minister.

27

 The day after Meade declared his candidacy, BlackRock announced that it was buying
the asset management business of Mexico’s Citibanamex.125 The deal included a
distribution agreement in which BlackRock would offer its asset management products to
Citibanamex clients through its network of 1500 branches in Mexico.
The Sovereign Wealth Fund Institute said that the acquisition helped further position
BlackRock as a “key international force in the world of Mexican retirement and
institutional capital… while locking up contracts with Mexican government investor
funds.”126 It also reported that Mexico’s sole state-sponsored pension fund,
PENSIONISSTE, had recently awarded BlackRock with a mandate to invest part of its
portfolio in European equities.127 Citibanamex CEO Ernesto Torres Cantú said that his
customers would benefit greatly from partnering with BlackRock, a company that
managed funds five times Mexico’s GDP. Cantú also commented on Meade’s candidacy
saying that his declaration as the candidate of the PRI was a “very good sign” for
Citibanamex.128
A month later in December, AMLO launched his
widely expected campaign as the candidate of the
National Regeneration Movement (MORENA). In
a hotel announcement in Mexico City, the
candidate also unveiled his cabinet of eight men
and eight women including Rocio Nahle García as
AMLO’s choice for secretary of energy.129 While
Meade’s candidacy was welcome news for
BlackRock, AMLO’s candidacy was not. First, the
populist MORENA candidate was fiercely opposed
to Peña Nieto’s energy reforms, initially promising a referendum to revoke them entirely
but later softening his position by promising to simply review all contracts awarded by
PEMEX for private drilling and exploration. Even AMLO’s softer stance however, would
have threatened BlackRock’s large investments in Sierra Oil and Gas, one of the first oil
contract winners.130

125

Press Release, BlackRock to Acquire Asset Management Business of Citibanamex, BlackRock,
November 28, 2017, available at http://ir.blackrock.com/file/Index?KeyFile=391251077.
126
BlackRock Gets in Early at Mexico’s PENSIONISSSTE, Sovereign Wealth Fund Institute, November
27, 2017, available at https://www.swfinstitute.org/swf-news/blackrock-gets-in-early-at-mexicospensionissste/.
127
http://www.fundssociety.com/en/news/alternatives/afore-pensionissste-grants-its-first-investmentmandate-to-blackrock.
128
(Spanish) Hiroshi Takahashi, José Antonio Meade es una muy buena señal: Citibanamex, El Heraldo De
Mexico, November 30, 2017, available at https://heraldodemexico.com.mx/opinion/meade-senalcitibanamex/.
129
(Spanish) AMLO propone a Rocio Nahle como secretaria de Energia, e-consulta.com Veracruz,
December 14, 2017, available at http://www.e-veracruz.mx/nota/2017-12-14/politica/amlo-propone-Rocíonahle-como-secretaria-de-energia.
130
Q&A: AMLO wants ‘radical change’ in Pemex, Argus Media, March 5, 2018, available at
https://www.argusmedia.com/pt/news/1637690-qa-amlo-wants-radical-change-inpemex?backToResults=true.

28

 Second, AMLO’s choice of Nahle García as Secretary of Energy would almost certainly
have rattled the asset fund manager given her staunch opposition to energy reform and
the petition she filed in 2016 to force the removal of former BlackRock director Isaac
Volin from PEMEX for conflicts of interest.
Third, BlackRock was planning substantial new infrastructure investments in Mexico,
many based on the 2012 energy reforms and that required certain continuity with Peña
Nieto’s infrastructure and energy policies. According to a March 2018 report, the
company was preparing to issue a new investment vehicle in the Mexican stock market
called a “CerPI” (Certificado de Proyectos de Inversión). Described as an “evolved
CKD”, the certificates were designed to finance infrastructure projects by attracting more
sophisticated funds into the market, while giving pension funds more latitude to delegate
responsibility and risk to fund managers.131 Placed through a new subsidiary named
BlackRock Mexico Infraestructura III, the new CerPI plans to invest in several new
infrastructure projects including projects related to the “generation, transmission and
distribution of electricity and hydrocarbons.”132
BlackRock’s new infrastructure investment plans also showed just how large and diverse
the company’s infrastructure plays had grown in the country. In addition to energy, the
CerPI registration revealed potential investments in roads, railways, ports, bridges,
drinking water, hospitals, fixed and wireless telecommunications, and even schools and
universities.133
Consequently, BlackRock’s interest and engagement in the Mexican election became
increasingly apparent in the final four months of the campaign. In April, Citibanamex
economist Sergio Luna issued an 11-page report titled “The April Paradox” that
acknowledged AMLO’s “probable victory”, but warned that if he carried out his
promises of reversing Peña Nieto’s reforms, Mexico’s fiscal deficit and interest rates
would rise.134 A week later BlackRock joined Citibanamex and other global investment
funds to hear from all three candidates at a Citibanamex-sponsored candidate forum.135
While Meade and National Action Party candidate Ricardo Anaya attended personally,
AMLO sent his advisor Carlos Urzúa Macias instead.

131

(Spanish) Judith Santiago, BlackRock prepara su Segundo Cerpi en la BMV, El Economista, March 13,
2018, available at https://www.eleconomista.com.mx/mercados/BlackRock-prepara-su-segundo-Cerpi-enla-BMV-20180313-0104.html; http://www.infrastructuremexico.com/2018/03/01/cerpis-101-fundingmexicos-future-infrastructure/.
132
Santiago, El Economista, Mar. 13, 2018.
133
(Spanish) J. Jesus Rangel M., BlackRock, lista para la infraestructura, Milenio, July 3, 2018, available at
http://origin-www.milenio.com/opinion/jesus-rangel/estira-afloja/blackrock-lista-para-la-infraestructura.
134
Dolia Estevez, Citigroup Sees Trouble for Mexico’s Growth, Reforms If Leftist Candidate Wins
Presidential Election, Forbes, April 27, 2018, available at
https://www.forbes.com/sites/doliaestevez/2018/04/27/citigroup-sees-trouble-for-mexicos-growth-reformsif-leftist-candidate-wins-presidential-election/#5b1079a75f42.
135
(Spanish) Mauricio Flores, Los 7USD trillones que evito AMLO, La Razon, April 30, 2018, available at
https://www.razon.com.mx/los-7usd-trillones-que-evito-amlo/.

29

 On May 7, 2018, Fink met again with Jose Antonio Meade to discuss the campaign and
economic policy.136 Fink also met with AMLO in a meeting described as “affable” by his
economic adviser, Carlos Urzúa Macias. “There was an immediate click between them.
They both left the meeting charmed,” he told Reuters. AMLO told a Mexican interviewer
later that day that he would uphold the rule of law and would not expropriate private
property. “They have lots of information… they’re intelligent,” AMLO said of Fink and
BlackRock after the meeting.137 Proceso reported that according to Rocío Nahle García,
the AMLO meeting was actually requested by BlackRock to remind the candidate of the
company’s size and investments in Mexico.138
The future energy minister, who only months before had decried Peña Nieto’s energy
reforms and tried to force the ouster of Isaac Volin from PEMEX over his BlackRock
connections, had come prepared with a detailed report for the candidate outlining
BlackRock’s investments in Los Ramones II and in gasoline and diesel pipelines. Rocío
Nahle García’s report also showed that BlackRock was the largest investor in the
Mexican Stock Exchange and owned substantial shares in Carlos Slim’s América Móvil,
Cemex, Coca Cola, FEMSA and Alfa.
Despite AMLO’s charm offensive and softened position on PEMEX contracts,
BlackRock declared in a June “geopolitical risk” report that an AMLO victory would
cause “deterioration in Mexico’s economic policy.” The report warned investors about
their positions in Mexico ahead of the election.139 In an effort to further walk back
AMLO’s campaign promise to review or revoke infrastructure contracts tainted by
corruption, Urzua Macias reiterated in early June that the presidential front-runner was
not a radical leftist. “We are really not leftist, we are center-left,” he said in an interview
with Reuters.140
On July 1, 2018, Andrés Manuel López Obrador, who mobilized voters with his promise
to stand up to corruption and reject the technocrats and pro-American politicians whom
he called the “mafia of power”, won a decisive victory in Mexico’s presidential election
making him the first leftist and populist president in more than 30 years.141
136

(Spanish) Meade se reune con Larry Fink, president de BlackRock, Excelsior, July 5, 2018, available at
http://www.excelsior.com.mx/nacional/meade-se-reune-con-larry-fink-presidente-de-blackrock/1237476.
137
Dolia Estevez, Mexican Presidential Frontrunner Tells BlackRock CEO He Will Not Expropriate
Private Property, Forbes, May 15, 2018, available at
https://www.forbes.com/sites/doliaestevez/2018/05/15/mexican-presidential-frontrunner-tells-blackrockceo-he-will-not-expropriate-private-property/#2fb8de2c3561.
138
(Spanish) Jesusa Cervantes, “No Habra crisis economica” si gana Juntos Haremos Historia, Proceso,
June 3, 2018, available at https://elplomero.files.wordpress.com/2018/06/proce21-70.pdf.
139
(Spanish) Ahora BlackRock, ligada a negocios petroleros de familia de Salinas, prevé “deterioro” si
AMLO gana la Presidencia, Notigodinez, June 24, 2018, available at https://notigodinez.com/ahorablackrock-ligada-a-negocios-petroleros-de-familia-de-salinas-preve-deterioro-si-amlo-gana-la-presidencia/.
140
Michelle Abrego, ‘We’re not that leftist’: Mexico’s Amlo seeks to reassure BlackRock & co., Citywire,
June 8, 2018, available at http://citywireamericas.com/news/we-re-not-that-leftist-mexico-s-amlo-seeks-toreassure-blackrock-and-co/a1127467.
141
Joshua Partlow, Lopez Obrador wins Mexican presidency, becoming first leftist to govern in decades,
The Washington Post, July 2, 2018, available at https://www.washingtonpost.com/world/mexicans-headto-polls-to-choose-a-new-president/2018/07/01/517e8670-7a2a-11e8-ac4e-421ef7165923_story.html.

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 In a fitting coda to BlackRock’s six-year love affair with President Peña Nieto, news
sources mistakenly reported the same day that the outgoing President’s finance minister,
Luis Videgaray had already landed a job at the company. BlackRock denied the
reports.142

142

(Spanish) Jose Diaz Briseno, Niega BlackRock llegada de Videgaray, Reforma, June 29, 2018, available
at
https://www.reforma.com/aplicacioneslibre/articulo/default.aspx?id=1431376&md5=008f545c690a6bee2f4
781d4c920f072&ta=0dfdbac11765226904c16cb9ad1b2efe.

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