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Originally published February 15, 2013 at 10:06 AM | Page modified February 15, 2013 at 10:05 AM

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Political clout got Puerto Vallarta casino reopened despite fire danger

Locals and U.S. tourists flock to Mexico casino which reopened only a few hours after being shut for safety violations.

McClatchy Newspapers

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

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

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

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

Calderon is now a fellow at Harvard University’s Kennedy School of Government.

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

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

The Casino Vallarta, with its red-and-black motif and poker insignia on the outside walls, draws a steady crowd, including many Americans and Canadians. Cruise ships dock throughout the year here, coming to a wharf right in front of the casino. Puerto Vallarta is Mexico’s second most visited resort, drawing 3 million tourists a year.

Fighting for safety

Among the municipal representatives at the casino that afternoon in November was Susana Mendoza Carreno, a feisty councilwoman who is the point person on issues of citizen protection.

As soon as Carreno came to office Nov. 1, she started working with inspectors to ensure that casinos, public schools, gas stations and day care centers all were up to code. Such facilities have an appalling safety record in recent years, and she thought it would be in the public interest to assure their safety.

Indeed, only 15 months earlier, 52 people died in a casino in Monterrey in Mexico’s northeast, when gangsters armed with assault weapons and gasoline canisters entered the gaming hall one weekday afternoon, apparently angry that the owner hadn’t met an extortion demand, and set it ablaze.

Several of that casino’s emergency exits were locked.

A June 2009 fire that raged through a day care center in Hermosillo in Sonora state killed 49 tots and injured 76 others, all of them age 5 or younger. The day care center had no fire extinguishers or smoke detectors.

Carreno said she was present at Casino Vallarta as inspectors slapped on the seals. At that moment, her cellular phone rang.

“The colonel from public security called me and he started shouting, ‘Councilwoman, take off the seals!’ ” Carreno said. “He yelled at me like I was his employee.”

A few weeks later, Carreno received a visit from the casino’s lawyers.

“They came here to ask me what I needed. How could they help me?” Carreno said, indicating that it was an underhanded offer of cash. “I told them, ‘What I need is for you to take care of this, because the day there are deaths, I will be responsible, too.’ ”

As in many countries, businesses shut down by health and safety inspectors in Mexico typically have a slog before they reopen — months, rather than 30 minutes.

“You have to go before a municipal judge. The judge issues you a fine. Then you have to fulfill the (safety) requirements. If you don’t fulfill them, you get your operating license revoked,” Carreno said.

Power behind the casino

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

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

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

All three men reported to Abraham Gonzalez, a deputy interior secretary close to Calderon. In fact, the relationship was so warm that when Calderon announced his candidacy for the presidency on May 29, 2004, he did so at Gonzalez’s Las Palmas ranch in Jalisco state.

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

Gonzalez, a former candidate for governor of Jalisco, is a big player in the state’s politics, including in Puerto Vallarta, Jalisco’s tourism magnet.

Indeed, Gonzalez helped Puerto Vallarta Mayor Ramon Guerrero win his post and has placed underlings in key positions throughout the city government.

Gonzalez, in a telephone interview, acknowledged he has close political ties to the mayor but denied having any connection to Casino Vallarta.

“I have no interest in it. I didn’t at the time and have none today,” he said. What’s more, he added: “I am not a friend of the industry. I don’t think casinos are good for the country.”

Neither Mayor Guerrero nor his chief of staff, Antonio Pinto Rodriguez, was available for an interview. Pinto agreed to speak to a McClatchy reporter, but after keeping him waiting for six hours he sent a secretary to say the interview would not take place.

City fathers appear eager to keep newcomers out of the casino business in Puerto Vallarta — perhaps to protect the existing four casinos in the city. On Jan. 1, the cost of a municipal license for a casino climbed from the equivalent of between $787 and $1,181 a year to $787,400.

Cashing in

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

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

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

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

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

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

“They threatened me. They told me I’d be sorry, that I didn’t know whom I was messing with,” Terron said, adding that they videotaped their interrogation of her. “They told me that I’d never forget them.”

During her detention, Terron said she took a good look around the casino.

“Where there were signs for fire extinguishers, there were no extinguishers themselves,” she said. “The only emergency exit was blocked with a waist-high gray machine.”

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