While the Mexican Congress debates whether to hand Mexican taxpayers responsibility for part of Pemex’s labor benefits liabilities ($87.2 billion as of March 31) in anticipation of the privatization of the state-owned oil giant, a Texas court issued a final judgment against Pemex's powerful Workers Union authorizing Texas company Arriba Ltd to collect millions of dollars in damages for breach of contract.
Judge Sylvia Matthews, of the District Court of Harris Country, 281st Judicial District, issued a ruling on July 15 affirming a jury verdict from February granting Arriba Ltd the right to recover millions of dollars from the Petroleum Workers Union of the Republic of Mexico (STPRM), which stemmed from a 1986 breach of contract lawsuit.
"The result of her decision is between $426 million and $1.4 billion, depending on how you calculate the interest," attorney Michael J. Pérez, the plaintiff's lead trial counsel, told me.
In 1984, Arriba Ltd entered into an agreement with the STPRM to purchase a minimum of 6 million barrels of residual oil that Arriba Ltd would refine and sell in the U.S. market. The oil was never delivered and Arriba sued in 1986. The amount mentioned by Pérez includes accrual of interest through 30 years of complex litigation not only in Texas, but also in New York and California.
"After 30 years of cons, frauds and misrepresentations by the union and a sense of absolute impunity, Arriba Ltd and its owners have finally been vindicated," said Pérez, a partner at the San Diego-based Pérez, Wilson & Feasby law firm.
Mexican oil workers union boss Romero Deschamps.(Photo Credit: Isaac Esquivel/Cuartoscuro)
Paul Simon, a Texas attorney with Simon Herbet Mclelland & Stiles, who represented the union during the trial, did not return my calls.
Due to the manner in which the 1984 contract was written, Arriba cannot collect inside Mexico. James B. Gomez, as receiver for Arriba, "is entitled to enforce the 1986 default judgment in any legal manner, anywhere in the world, except in the country of Mexico," Judge Matthews said in the final judgment.
If the union does not comply and continues refusing to pay Arriba Ltd, the judgment gives Arriba the right to seize assets outside Mexico found to be in the name of the union, Romero Deschamps and his close relatives and associates, directly or through front men, as long as Arriba can prove that funds from the union were used to purchase them.
In Mexico, among the powerful politicians perceived to be corrupt, Romero Deschamps leads the list. Aside from heading the 127,000-member oil union, he is also a federal Senator from the ruling PRI party. With a union monthly salary of $1,864, he is notorious for living far beyond his means.
In May 2013, the Mexican newspaper Reforma reported that Romero Deschamps' son, Carlos Romero Durán, owns two apartments in a luxury condo building in Miami Beach. According to the paper, Romero Durán paid $7.5 million for them. In Miami he reportedly drives a $2 million limited edition red Enzo Ferrari sports car, a gift from his father. Paulina Romero Durán, Romero Deschamps' daughter, is known to travel around the world in a private jet accompanied by her three English bulldogs. One of her favorite countries is Dubai, where she is suspected of owning property. She is famous for wearing expensive designers cloth and handbags.
During a trial in Houston, from February 3-18, 2014, Romero Deschamps was accused of embezzling millions of dollars of union funds that allegedly had been allocated to pay one of the union's attorneys in the U.S. Carlos A. Ryerson, who worked for the union from 1990 to 2004, said that in August 1992 Romero Deschamps and two other top union officials distributed among themselves $2.5 million in cash that was supposed to be used to cover Ryerson's legal fees.
Ryerson testified that he was only paid $1 million and that he saw Romero Deschamps and the union's treasurer count the $2.5 million they kept after withdrawing it from a Banamex branch near the Zocalo, Mexico City's central plaza. Yet the court determined that Ryerson should recover nothing on his breach of contract claims and attorney's fees.
Mexican analysts are asking if under the new energy reform that will allow privatization of Mexico's oil sector, the Mexican government will also absorb the trade union's debts abroad.
Romero Deschamps was included in The 10 Most Corrupt Mexicans of 2013 list that I published on Forbes.com.
Twitter: @DoliaEstevez
