Mexican Snake: José López Portillo
The conservative political savior José López Portillo assumed the Presidency on December 1, 1976 after the tumultuous, populist,
and extravagance of the Luis Echeverría presidency. On November 30, 1982, six years
later, he left in disgrace; many, perhaps most Mexicans, considered him a snake, a man who
had feathered his own nest while damaging the country by fiscal irresponsibility,
corruption, and demagoguery. He spent much of the rest of his life in exile but went back
to Mexico and died on February 17, 2004 at the age of 83.
There were those who said he never should have become a
politician but remained a member of a well-respected family, a university professor, an
author, and a philosopher. Perhaps it would have been acceptable to become an
administrator at the sub-cabinet level of the national government, for these did not
require the political skills of a President. But he rose beyond to become Secretary of
Treasury, 1973-75, and then President, 1976-82.
He was born on June 16, 1920 in Mexico City. His father, José
López Portillo y Wéber, was a soldier, engineer and historian of middle-class status,
far above the average person. His paternal grandfather, José López Portillo y Rojas was
a distinguished intellectual and member of the Mexican Academy who served in the cabinets
of two conservative governments. He was proud of the fact that he was the
great-great-great grandson of José María Narváez (17681840), a Spanish explorer
who was the first to enter Georgia Strait in present-day British Columbia. The future
president was born as somebody but not rich. He graduated from public schools in Mexico
City, including the National University which he entered in 1939 and from which he
graduated in law and political science in 1946. Part of his university education was
obtained at the University of Chile with the aid of a scholarship from the Chilean
government. He obtained his law degree in 1946.
He married his childhood neighbor, Carmen Romano, in October,
1951. They moved into a three-storey house given to her by her father. She bore him three
children--José Ramón, Carmen Beatriz, and Paulina. The couple were separated but
reunited for the sake of appearances when he was designated the Partido Revolucionario
Institucional (PRI) presidential candidate in 1975 for the campaign and the duration of
his presidency. She performed the public duties of First Lady, mostly entertaining
dignitaries and doing good works. She created the National System for Integral Family
Development (a social assistance agency for families), and various programs to promote the
arts. Nevertheless, the couple maintained separate lives throughout his presidency and
physically separated again once he left the presidency. They divorced in 1991.
The young man became a successful lawyer and a professor of law
at his alma mater the National Autonomous University of Mexico (UNAM) in 1947, remaining
in that role until 1958. His textbook on the general theory of the state earned him extra
income. He wrote a book about the Mexican feathered serpent god Quetzalcóatl in
1965 and then, in 1975, a philosophical novel, Don Q. , wherein he waxes
philosophical about figurative as opposed to literal meanings in life. In 1961, after he
founded the doctorate in Administrative Science in the business school (Escuela Superior
de Comercio y Administración (E.S.C.A.) in the National Polytechnic Institute. He seemed
the stereotypical academic--teaching, writing a textbook, involving himself in academic
administration--as well as being a novelist, painter, athlete, and equestrian. He was an
attractive, charming man of virtu.
Perhaps he entered public service in 1959 at age 39 because of
his childhood friendship with Luis Echeverría Alvarez, a rising politician who would be
President, 1970-76. They had played together as boys; enjoyed a friendship at UNAM
students where they both worked on the school newspaper in 1940; traveled together on the,
long voyage to Santiago, Chile where they studied on a fellowship in 1941; and continued
their friendship after receiving their law degrees. Although It was common for a lawyer to
practice law, teach part-time, and work at a low level national government job, he
abandoned the law practice as he rose in government ranks.
His government career before becoming President in 1976 is
briefly summarized. From a low post, he rose to the Cabinet in fourteen years. He was seen
as an amiable, connected, technocrat or, at least, someone who could manage technocrats.
- 1959--Technical Advisor, Secretary of National Heritage.
- 1960-65--Director General, Federal Commission for Material Improvement in the Secretary
of National Heritage.
- 1965--Director General, Juridical Consultative Office, Secretary of the Presidency.
- 1966--Member, Joint Secretarial Commission (Treasury, Presidency) to formulate
- 1968-70--Subsecretary of the Presidency.
- 1970-72--Subsecretary of National Heritage.
- 1972 (August) 1973 (May)--Director General, Federal Electric Commission.
- 1973 (May)-1975-- Secretary of Finance and Public Credit [Treasury]
Understanding the Echeverría regime (1970-76) is
imperative to understand the López Portillo presidency. President Echeverría tried to
become a hero to the average person in the mode of President Lázaro
Cárdenas (1934-40) after the hard-line, iron fisted conservatism of his predecessor,
Gustavo Díaz Ordaz under whom he had been Interior minister, responsible for domestic
politics and security. As such, Echeverría had ordered the repression of the Student
Movement of 1968 and was responsible for the Tltatelolco Massacre of October 2, 1968 just
before the Mexico City Olympiad . As Jim Tuck remarks:
[He] released students who had been arrested after Tlatelolco. ordered rigid price
controls on basic commodities, added a 10 percent tax to luxury items and a 15 percent
surtax to bills in first-class restaurants and nightclubs, increased subsidies to
universities and technical institutes and gathered the highest percentage of National
Autonomous University (UNAM) graduates (78 percent) in his cabinet.
He tried to help the rural poor, regardless of cost, creating some 17 million more ejidos
(communal farms) partly by expropriating rich, irrigated lands in Sonora and Sinaloa
states. Money was poured into rural credit banks and ejidos received preferential
treatment. Echeverría thought it could jump start economic development among the rural
poor and increase agriculture production simultaneously. He was wrong, very wrong. Mexico
had to import foodstuffs.
When his Treasury Secretary, Hugo B.
Margáin, balked at borrowing more money, domestically or externally, to finance
federal government programs, he was dismissed an sent to London as Ambassador and the
pliant López Portillo was put in his place in May, 1973. López Portillo had no qualms in
doing what his friend wanted. He found the means to finance the programs of his friend.
Although he did improve the tax collection system, he continued borrowing vast sums.
Petroleum played a key role in both the
Echeverría and López Portillo because Mexico was an oil-exporting nation during the
decade that crude oil prices skyrocketed. The first jump in oil prices came with the Oil
Crisis of October, 1973 when the conservative Organization of Arab Petroleum Exporting
Countries embargoed petroleum exports to the United States. They were angry because the US
supported Israel in the Yom Kippur War against some of its members. Oil prices skyrocketed
from $3 a barrel to almost $12 a barrel by March, 1974, creating inflation and recession
in countries allied to the United States. Mexico was the third largest trading partner of
the US and the US was, by far, its largest trading partner. Quadrupled oil prices helped
Mexico at first and enabled its government to borrow funds but Mexican dependency on the
gigantic US economy created problems as American spent less in Mexico. By the time José
López Portillo took over on December 1, 1976, the peso had dropped in value from 12.5
pesos per dollar to 20 pesos per dollar and the external debt had risen from $6 billion
dollars in 1970 to $20 billion dollars in 1976.
López Portillo became president without significant opposition
once Echeverría had chosen him but he campaigned throughout the country so people could
see the next president and to touch base with the various politicos in the PRI. He was
seen as a conservative technocrat who would stabilize government finances and the economy
not as a politician. No one doubted he would winthe PRI candidate was
always the winnerbut the National Action Party (PAN) fought within itself over
ideology and over the efficacy of running a presidential candidate and, thus, supporting
In the first few years, he and his
administration did all the right things to stabilize Mexico. He effectively let others
know that he was his own man, that Echeverría was the past president. He reassured
the business community. He persuaded labor to moderate its wage demands while encouraging
business and industrial leaders to cooperate with labor with the Alliance for Production
(Alianza para la Producción). He reorganized cabinet agencies. The Secretary of Budget
and Programming replaced the Seceretary of the Presidency. Agriculture and Water Resources
were combined. The Secretariat of Natural Resources and Industry was created. He planned
to cut the budget deficit from 9% of the Gross National Product in 1976 to 6% in 1977 and
then to 2.5% by 1979. Taxes were increased on excess profits, luxury items, motor
vehicles, some incomes. Price controls were extended on basic foods. Some drug prices were
decreased by 60%. López Portillos administration saw the inflation rate drop in
half from 30% to 15% by mid-1977. The economy grew only 2% but it grew.
To curry favor with the Mexican left, he
had a political amnesty law passed. In an unprecedented move in an anticlerical country,
he received Pope John Paul II in January, 1979; the Pope celebrated a open air mass. The
Mexican Constitution forbade public religious ceremonies.
One of his greatest achievements was to
move Mexico towards democracy by enlarging political participation The Federal Law of
Political Organizations and Political Processes of 1977 lowered the number of members a
political party needed to run candidates in elections. Alternatively, a party could get
conditional registration to run candidates which would become permanent registration if it
received 1.5 percent of the national vote. The minority parties gained from free
television and radio time. The lower house, the Chamber of Deputies, was enlarged by
constitutional amendment to 400 members, 100 of which would go to minority parties on a
proportional representation basis. PRI maintained hegemony, however. As Joseph Klesner
notes, the reform probably fragmented the opposition left. On the other hand, PAN, the center-right party, gained seats and national
López Portillo lost his perspective when
vast petroleum reserves were discovered in 1978 in the Gulf of Mexico. By the beginning of
1979, proven reserves were 26 billion barrels with possible reserves of 100 billion
barrels. Mexico was suddenly in the same class as Saudi Arabia. As he said, "In
the world of economy, countries are divided in two: those that have oil and those that
don't have it. And we have it!" In 1981, Mexico became the fifth largest
oil-producing nation with daily production of 2.3 million barrels (scheduled to be 2.7
million in 1981). López Portillo announced that proven reserves stood at more than 60
billion barrels, an increase of more than 20%. Oil exports, primarily to the United
States, earned more than $12 billion as Mexico raised its prices in tandem with OPEC.
Natural gas exports to the United States (300 million cubic feet per day) were priced at
$4.47 per thousand cubic feet in an agreement signed by both nations in March.
Profits from oil boom and monies borrowed
massively based on those profits, present and future, were spent on investments in
economic development projects regardless of merit. Incomes rose legally and illegally. The
flow of money into Mexico overwhelmed accounting system, not that López Portillo cared.
The Gross Domestic Product grew at the rate of 8% a year in the last years of the decade,
surpassing the 6% rate of the years of the Mexican Miracle.
The President believed he could end rural
poverty and meet the nations needs for food and fiber with oil money. Mexican
agriculture was unable to supply the nations needs; by 1980 Mexico a net food
importer. So López Portillo emphasized production of basic foodstuffs for domestic
consumption by creating the Mexican Food System (SAM). It sought to help small farmers
grow more food for the domestic market while also subsidizing a basket of staples to
19 million undernourished people. SAM was to be financed by oil revenue and international
borrowing, something which could not be sustained by the economic crisis of 1981-82.
President Miguel de la Madrid ended the program in 1982.
Mexico became more independent of the
United States in foreign policy. López Portillo proposed a World Plan for Energy
Resources to the United Nations. He sponsored a North-South Summit in Cancún in 1981 to
promote dialogue between First and Third World countries. Fidel Castro, the Cuban
dictator, was received warmly, much to the displeasure of the United States. He
reestablished diplomatic relations with Spain, broken since the fascist Francisco Franco
came to power in 1939.
He appointed relatives to important
positions. His sister, novelist Margarita López Portillo, became Director of Film, Radio
and Television. His son, José Ramón, became Undersecretary of Programming and Budget.
The President bragged ¡Mi hijo es el orgullo de mi nepotismo! ["My son
is the pride of my nepotism"]. The Los Angeles Times asserted that Rosa Luz
Alegria was his mistress when he was President and that he made her Minister of
López Portillo and his advisers were
betting on the never never, that international oil prices and international
demand for oil would remain high or increase, allowing Mexico to finance its needs and
desires regardless of what happened to the United States economy. They thought that oil
made Mexico free, finally, that the US needed Mexico more than Mexico needed the US. They
were wrong. The United States economy determined Mexicos economy.
In the United States,
stagflation, the continual rise in prices combined with slow economic growth
and higher than usual unemployment, was fueled by the quadrupling of oil prices in 1973-74
and its fallout. In the post-WWII period, inflation had averaged 3.2% but reached a 7.7%
rate after the Oli Crisis. Then it rose to 9.1% in 1975. By 1979, it had risen to 11.3%,
then to 13.5% in 1980. It fell from 10.3% in 1981 to 3.2% in 1983. Automobile prices
increased 72% between 1973 and 1979. New house prices went up 67%. In 1979, because the
Iranian Revolution interrupted that nation's production of petroleum, gasoline prices
increased 60%. High unemployment continued. Investment, savings, and productivity
declined. Carter advocated and got the deregulation of many businesses and industries in
hopes of stimulating business and industry but these measures had no apparent immediate
Stagflation in the United States and
other Western nations reduced the demand for oil and, in 1981, they fell precipitously.
Paul Volker, Chairman of the Federal Reserve System, began forcing interest rates upwards
in 1979 to combat inflation.
Mexico was hit with a double whammy. Its
income dropped at the same time its service increased on its $60 billion external debt.
López Portillo swore publically that he would defend the peso like a dog. It
plunged in February, 1982 from 22 to 70 per dollar, or 78%, the steepest drop in Mexican
history. The President was often met thereafter by barking. Devaluation meant, of course,
that more pesos would be necessary to pay the dollar-denominated external debt. Richard
Boudreaux noted: By 1981, when the oil boom went bust, 87 cents of every dollar of
assets held by PEMEX, the state oil monopoly, were owed to foreign banks. The debt was
one-fifth of the country's total foreign debt. And in the month before the peso collapsed
in August 1982 by 60%, a crisis of investor confidence sent $9 billion out of the
country. Mexico had to default on its debt and give up some freedom of action in
order to get emergency aid from the United States and international agencies.
In a fit of fury, López Portillo
announced the nationalization of the banks in September, 1982. In his State of the Union
address, he blamed the banks for Mexicos financial ills, saying that they had aided
and abetted the capital flight. He broke down in tears, begging the forgiveness of
Mexico's impoverished millions. They didnt. He finished out the remaining three
months of his term in disgrace.
The new President, Miguel de la Madrid
Hurtado, was a sober, conservative, technician with a masters degree in public
administration from Harvard. He promised a moral renovation in the government and a few
visible people were prosecuted He resisted efforts to punish his processor, letting him go
quietly into exile in Europe. Perhaps some house cleaning occurred at lower levels. He
would reverse much of what López Portillo did, including the bank nationalization,
restoring confidence in the business and industrial communities. Mexico would join GATT,
opening the Mexican economy to competition.
Away in Spain, López Portillo
defended his political and economic actions including an autobiography but continued an
unconventional personal life. He lived with his Mexican mistress, Alegria, and divorced
his wife, Carmen in 1990. After he and Alegria split, he married retired Yugoslavian-born
film star Sasha Montenegro in 1995 and had two children with her. They returned to Mexico
in the late 1990s but separated years later. His health worsened. Double bypass heart
surgery in 2001, ulcers on his legs in February, 2003, and respiratory and heart problems
when he was admitted to Angeles del Pedregal Hospital in February, 2004. He died at 8:15
PM on February 17, 2004, surrounded by some fifty relatives and close friends.
His obituaries blamed him as a corrupt,
incompetent. As it were, a snake. López Portillo had become very rich while in office
according to popular lore. Not only had e bought an expensive mansion for his mistress but
was able to replace it with another when his wife confiscated the first. Before he
finished his term, he built a five mansion compound on a hill overlooking Mexico City,
dog hill as wags called it. Many claimed that he became a billionaire while in office. He was able to live in
Europe. He certainly acquired money from somewhere; he was not rich before becoming
Perhaps his fascination with
Quetzalcoatl, the Toltec feather serpent and god-king encouraged that view, a mocking of
his artistic and intellectual interests. He certainly had dreamed big, of making Mexico
less dependent upon the American behemoth, of using oil revenues to develop the nation
over the long-term for a sexenio was too short a time. Quetzalcoatl, was driven out; so
was López Portillo.
The United States was in economic
difficulty for more than the decade of the 1970s and its conservative leaders could not
solve the problems. How was Mexico expected to do better? If the world economy had not
gone into a tailspin in 1981 and petroleum prices had not plummeted, López Portillo might
have won the bet. But Presidents are not supposed to gamble on such a scale. López
Portillo did to his everlasting shame.
Donajd J. Mabry
Alexander, Charles, Jay Branegan, and Laura López, A Freeze Play at the
Banks, Time, September 13, 1982.
Anonymous, Carmen Romano, Wikipedia, la enciclopedia libre. http://es.wikipedia.org/wiki/Carmen_Romano.
Boudreaux, Richard , Jose Lopez Portillo, 83; Former President Led Mexico in Boom
and Bust, Los Angeles Times, February 18, 2004.
Cárdenas, José, Niega López Portillo recibir pensión millonaria,
Noticieros Televisa, agosto 14, 2003.
Central Intelligence Agency, Outlook for Mexico, April 25, 1984.
Cuellar, Mireya , Corrupción, frivolidad y despilfarro, ejes del sexenio
Lopezportillista, La Jornada, February 18, 2004.
Kate Doyle, Prelude to Disaster: José López Portillo and the Crash of 1976
National Security Archive Electronic Briefing Book No. 115, March 14, 2004.
Escalona, Ivan, José López Portillo,: monografías.com.
Fisher, Swayze, José López Portillo and The Financial Crisis of 1982,
Historical Text Archive, 2002. http://historicaltextarchive.com/sections.php?action=read&artid=554.
Kandell, Jonathan, José López Portillo, President When Mexico's Default Set Off
Debt Crisis, Dies at 83, New York Times, February 18, 2004.
Klesner, Joseph , "Electoral Reform in Mexico's Hegemonic Party System: Perpetuation
of Privilege or Democratic Advance?" Presented at the Annual Meeting of the American
Political Science Association, Washington, D.C., 28-31 August 1997. http://www2.kenyon.edu/Depts/PSci/Fac/klesner/Electoral_Reform_in_Mexico.htm.
Mabry, Donald J., Mexico, Americana Annual, 1973-1984.
Tolchin, Martin, Paradox of Reagan Budgets: Austere Talk vs. Record Debt, New
York Times, February 16, 1988.
Tuck, Jim, Black gold, fool's gold: the oiling of a crisis (19381988),
Mexico Connect (http://www.mexconnect.com/articles/297-black-gold-fool-s-gold-the-oiling-of-a-crisis-1938%E2%80%931988).
Watkins, Thayer, Financial and Economic Crisis in Mexico in 1982,
 José López Portillo y Pacheco is his full
name but he was known as José López Portillo.
 Richard Boudreaux, Jose Lopez
Portillo, 83; Former President Led Mexico in Boom and Bust, Los Angeles Times,
February 18, 2004. Jonathan Kandell, José López Portillo, President When Mexico's
Default et Off Debt Crisis, Dies at 83, New York Times, February 18, 2004, asserted
that he bought her a $2 million mansion in Acapulco and then another villa after his wife
too the Acapulco dwelling.
 He contended in 2003 that he lived on an
annual pension of about 1,723, 000 pesos ($158,656 in 2003).
Donald J. Mabry