As Mexicans Vent, BlackRock Wonders if They Can Discern Their Best Interests

Two days before we released our report, The New Corporate Colonialism, BlackRock finalized a deal to acquire Citibanamex’s asset management business, doubling BlackRock’s assets under management in Mexico.[i]

A week later, BlackRock announced one its top sales managers, Alvaro Setien, would fill a newly-created position focused on securing new clients in Latin America for Aladdin, its ubiquitous risk asset and analytics platform. Setien will relocate from Santiago to Mexico City at the end of the year.[ii]

While BlackRock was busy expanding its footprint in Mexico and other countries in Latin America, Mexican citizens were taking notice of our report. To say many were unhappy is understatement.

A man who called himself El Chapucero has a YouTube channel with more than 436,923 subscribers.[iii]  El Chapucero took about 15 minutes to go over the report in detail, posting excerpts as he read along.  The video attracted over 100,000 views. Another Youtuber with some 300,000 followers likewise went through the report with fine-toothed comb, generating nearly 200 comments.[iv]

Included in the 750 comments El Chapucero received was the declaration, “Black rock is a criminal organization that has left extreme death in the world.”

Another irate observer wrote, “BlackRock controls everything. Peña Nieto bought the presidency of the Republic and that is why they left him as president; They had to insure the oil and all of Mexico’s business clear. And as a reward, BlackRock allowed them to take key public positions to also be part of the business. A real mafia of power…”

There were calls for further investigation to allow Mexico to “recover its sovereignty” and for boycotts of all trade and investment with the United States. One observer recommended “thinking as a boxer.” Now that BlackRock and members of Mexico’s power elite delivered their “first blows,” it is time for a counterpunch to “defend what little they have not touched,” he said. “By the way,” he added, “Peña must go to the gallows for a traitor.” Another person said the entire cabinet should be charged as accomplices to treason and termed BlackRock “a looter.”

At the same time, some of those who commented said part of the blame lies with the people of Mexico “who did not open their eyes before….voting for their corrupt presidents.” The ire in many of these comments for outgoing President Enrique Peña Nieto was balanced with a mix of hope, skepticism and, in some cases, resignation about what, if anything, President-elect Andrés Manuel López Obrador, or AMLO, can do about it when he takes office December 1.

One commenter pleaded, “Amlo do not do business with the United States, do not Blackrock, do not fail us, do not miss it, do not approve it, the senators chamber, please do not let us down.”

Shortly after we released our report, the Project on Organizing, Development, Education, and Research (PODER) released its own report documenting the company’s influence in Mexico.[i]  The detailed investigation revealed how BlackRock has capitalized on its investments in Mexico.

Amidst these concerns, global thought leaders are also wondering how Mexican leaders will respond to intrusions from outside the country. As hundreds of thousands of Mexicans were digesting our report, a revised NAFTA, dubbed the USMCA (at least for now) made its debut, prompting more establishmentarian commentators to speculate how AMLO would manage strained trade and investment ties with the United States.

“While Mr López Obrador has somewhat moderated his leftwing, nationalist stance, vowing to adhere to fiscal prudence and respect the central bank’s independence, many investors are concerned about what he could do with such a decisive political mandate,” said a Financial Timesstory published October 4 focused on what might be ahead for Mexico’s important oil sector.[ii]

Investors like BlackRock were thrilled when Peña Nieto ended the state monopoly over oil and gas development after 75 years, allowing foreign and private investment in the oil, gas and electricity industries. They are clearly worried AMLO will embrace populism with renewed gusto once he takes office. Even before AMLO’s landslide, BlackRock CEO Larry Fink paid a call on him and had an “affable” exchange,[iii]with AMLO reportedly pledging he would not expropriate private property.[iv]

As the AMLO presidency nears, company executives are still wary. For example, he has called for “public consultation” on whether construction on Mexico City’s new $13-billion international airport should proceed.

“He is building a new framework for how things are debated and decided, and bypassing Congress to consult a public that lacks proper technical research sends a very negative signal,” Axel Christensen, BlackRock’s chief investment strategist for Latin America and Iberia, told the FT.

Whether it is a “negative signal” might depend where one turns for news, the Financial Timesor El Chapucero, described as a, “Channel on Mexican politics with humor and fine irony, good analysis, without chest blows or absurd dogmas.”  The YouTube channel says its leaders “are neither chairmen nor of the Mafia, but we understand that the search for power in Mexico is wild, where there is no innocence or altruism, but black strategies, deception and perverse tactics.”

[i]https://conoceblackrock.projectpoder.org/.

[ii]https://www.ft.com/content/ce0ce8e0-c722-11e8-ba8f-ee390057b8c9

[iii]https://www.reuters.com/article/us-mexico-election-blackrock/mexican-leftist-candidate-has-affable-meeting-with-blackrocks-fink-idUSKBN1I81XI

[iv]https://www.forbes.com/sites/doliaestevez/2018/05/15/mexican-presidential-frontrunner-tells-blackrock-ceo-he-will-not-expropriate-private-property/#1b078e1e3561

[i]https://www.bnamericas.com/en/news/banking/blackrock-wraps-up-us34bn-aum-deal-with-citibanamex

[ii]https://citywireamericas.com/news/blackrock-appoints-veteran-to-lead-latam-aladdin-push/a1160885

[iii]https://www.youtube.com/watch?v=p8y7zALwdXw

[iv]https://www.youtube.com/watch?v=g937QFMlERE