VZCZCXRO0687
PP RUEHCD RUEHGD RUEHHO RUEHMC RUEHNG RUEHNL RUEHRD RUEHRS RUEHTM
DE RUEHME #0647/01 0641321
ZNR UUUUU ZZH
P 051321Z MAR 09
FM AMEMBASSY MEXICO
TO RUEHC/SECSTATE WASHDC PRIORITY 5460
RULSDMK/DEPT OF TRANSPORTATION WASHINGTON DC PRIORITY
RUEAFCC/FCC WASHINGTON DC PRIORITY
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC PRIORITY
INFO RUEHXC/ALL US CONSULATES IN MEXICO COLLECTIVE PRIORITY

UNCLAS SECTION 01 OF 02 MEXICO 000647 
 
SENSITIVE 
SIPDIS 
 
STATE FOR WHA/MEX, EEB/CIP 
STATE PASS TO USTR 
STATE PASS TO FCC 
STATE PASS TO DEPT OF TRANSPORTATION 
 
E.O. 12958: N/A 
TAGS: ECON ECPS EAIR ELTN EWWT PGOV USTR MX
SUBJECT: COMMUNICATIONS AND TRANSPORTATION SECRETARY TELLEZ 
OUT; CEDES PLACE TO PAN LOYALIST 
 
¶1. (SBU) SUMMARY:  Scandal has overtaken Secretary of 
Communications and Transportation Luis Tellez Kuenzler.  In a 
3 March press conference, President Felipe Calderon accepted 
Tellez's resignation and named loyalist Juan Molinar 
Horcasitas to succeed him.  Tellez, who oversaw the 
heavyweight ministry responsible for telecom, trasportation, 
and infrastructure, resigns amid an uproar raised by the 
release of secretly-recorded telephone conversations in which 
he attacks politicians and a former President.  For President 
Calderon, the change dampens political attacks and elevates 
an ally.  Months before July midterm legislative elections, 
Tellez's departure means more churn at a Secretariat of 
Communications and Transportation (SCT) struggling to advance 
telecom reform, execute a national infrastructure plan as 
part of countercyclical spending, and defend a cross border 
trucking demonstration project with the United States, 
currently at risk in the U.S. Congress.  END SUMMARY. 
 
SCANDAL 
------- 
 
¶2. (SBU) Audio recordings that came to light in January and 
February have laid Tellez low.  The first set of tapes 
revealed Tellez fighting dirty for primacy with the 
semi-independent SCT component Federal Telecommunications 
Commission (Cofetel).  In the recordings, Tellez instructs 
subordinates to claim that Tellez's dictates to the 
"(expletive) traitors" at Cofetel were in fact orders from 
President Calderon.  In a second, separate recording 
surreptitiously captured on the answering machine of Tellez's 
alleged former mistress, Tellez asserts former President (and 
Tellez patron) Carlos Salinas drank deeply and illegally from 
a now-defunct presidential slush fund -- a common claim, if 
less so from one-time members of the Salinas government.  The 
less-than-gravely-damning nature of the recordings has led to 
speculation that additional recordings exist, and that the 
specter of their release sped Tellez's exit.  Former SCT 
Under Secretary for Communications Purificacion Carpinteyro, 
forced out by Tellez in January, is under investigation for 
leaking the first set of tapes.  Since stepping down, she has 
taken to the airwaves to denounce Tellez, contributing to his 
demise.  Carpinteyro, a former corporate lawyer, says she may 
now run for Congress under the left-of-center Partido de la 
Revolucion Democratica (PRD) banner. 
 
DAMAGE CONTROL AT LOS PINOS 
--------------------------- 
 
¶3. (SBU) As political opponents circled, midterm elections 
approached, and key infrastructure projects slated to jump 
start economic recovery stalled, Calderon acted to put an end 
to this distraction.  Tellez's own Partido Revolucionario 
Institucional (PRI), irritated by his Salinas comments and 
positioning itself for mid-term elections, did little to 
defend their man.  The PRI is now belatedly criticizing the 
President's choice of Molinar.  Calderon has said Tellez, 
with a doctorate in economics from MIT, will stay on as a 
presidential advisor on economics.  From this perch, he may 
continue to influence policy at his former fiefdom. 
 
THE NEW MAN AT THE HELM 
----------------------- 
 
¶4. (SBU) Incoming Secretary Molinar is a Calderon loyalist, 
campaign advisor, former Partido Accion Nacional (PAN) 
spokesperson and former PAN deputy in the Camara de 
Diputados.  He earned a reputation as a tough negotiator 
during his days in Congress.  Chihuahua-born and University 
of California-educated (UCSD), he has little background in 
SCT's principal areas of work -- telecom, transportation, and 
infrastructure.  Until the changeup, he headed the national 
social security agency (IMSS).  Though the IMSS won a recent 
GOM award as Mexico's least customer-friendly bureaucracy, 
reviews of Molinar's accomplishments there are favorable. 
Molinar's selection continues Calderon's move toward 
re-stocking his administration with close allies. 
 
FULL PLATE -- AND VESTED INTERESTS -- AT SCT 
-------------------------------------------- 
 
¶5. (SBU) Tellez's critics painted him as a barrier to telecom 
reform and lamented the slow buildout of infrastructure 
projects during his tenure.  (In February, bidding on a major 
 
MEXICO 00000647  002 OF 002 
 
 
Pacific coast highway construction package failed to meet a 
minimum price threshold, forcing SCT to declare it deserted.) 
 That Molinar's experience is primarily political may be a 
recognition that, for the many technical issues within SCT's 
domain, vested interests opposed to reform are stubbornly 
political in nature.  The Calderon administration has made 
infrastructure spending the fiscal heart of its efforts in 
the face of the economic slowdown.  In initial comments to 
the media, Molinar said he would focus on executing budgets 
for highway, seaport, and airport projects under the national 
infrastructure plan and hinted at SCT staff changes.  He 
predicted tensions between SCT and Cofetel would ease. 
Industry and commentariat have reacted cautiously but are 
generally upbeat.  Business columnist Maricarmen Cortes notes 
Molinar has no enemies at Cofetel or among the telecom 
companies that often overshadow GOM regulators. Consultant 
Ernesto Piedras sees slow early going but hopes Molinar will 
bring stability and presidential sanction to the reform 
agenda over the remainder of Calderon's term.  Cabinet 
appointees do not face Senate confirmation in Mexico, and SCT 
directors expect their new chief to be in place this week. 
Visit Mexico City's Classified Web Site at 
http://www.state.sgov.gov/p/wha/mexicocity and the North American 
Partnership Blog at http://www.intelink.gov/communities/state/nap / 
BASSETT