Extortion Allegation Rocks Head of Teacher Union in Mexico

FILE- This July 14, 2006 file photo shows Elba Esther Gordillo arrive at a meeting with education workers in Mexico City. Gordillo is probably Mexico's most powerful woman, president for life of the nation's biggest union and a potential kingmaker in next year's presidential election. Now she's fighting allegations from a former ally that she tried to extort nearly $2 million a month from a federal agency in a scandal that has raised questions about how far reform has taken root in Mexico following the 2000 ouster of the long-ruling Institutional Revolution Party, or PRI. (AP Photo/Dario Lopez-Mills, File) (AP2006)

Corruption allegations involving one of Mexico's most prominent and powerful union leaders is rocking the country and adding uncertainty to what is shaping up to be a highly contested political season.

Elba Esther Gordillo is probably Mexico's most powerful woman, president of the nation's biggest union and a potential kingmaker in next year's presidential election.

She's fighting allegations from a former ally that she tried to extort nearly $2 million a month from a federal agency in a scandal that has raised questions about how far reform has taken root in Mexico following the 2000 ouster of the long-ruling Institutional Revolution Party, or PRI.

The accusation hurled by the former head of Mexico's social security system for government workers comes as Mexico's two largest political parties struggle over how avidly they should woo Gordillo, who has built a uniquely independent position of power as head of the 1.5-million-member teacher's union.

Miguel Angel Yunes said Tuesday that Gordillo had met with him at a San Diego hotel in 2007 and demanded his agency give 20 million pesos ($1.7 million) a month to finance activities of a new political party created by her allies.

Gordillo, who called the claim "rash, frivolous and slanderous," has beaten back years of attacks from union dissidents, political foes and journalists who have seen her as a symbol of Mexico's corrupt, old-style politics. Rivals have accused her of corruption, misuse of union funds and even a murder, but prosecutors who investigated never brought a charge against her.

Just last week, the 66-year-old Gordillo acknowledged she had a "political arrangement" with President Felipe Calderon before his election, agreeing to support him if he would agree to put some of her allies in key posts, including leadership of the social security agency, known as ISSSTE, that serves teachers. That was the job that went to Yunes.

Calderon, in a television interview late Wednesday, acknowledged that he appointed Gordillo's favorites but said the exchange happened after the 2006 elections.

"It was an agreement for the quality of education involving, among other things, that as president I would respect positions or profiles that she had recognized or that had been negotiated from the previous administration," Calderon told a Televisa network channel.

Calderon said Gordillo in return promised to be an ally in pushing an education reform. Four and a half years into Calderon's administration, the comprehensive reform is pending.

Even after the uncomfortable accusations raised by Gordillo, Calderon said he respected "the teacher," her popular nickname.

Calderon said the alleged inappropriate use of public funds by Gordillo and Yunes is a serious matter the government should investigate.

"I accept and recognize that I, Elba Esther Gordillo, did support Mr. Yunes, but I insist it be clear that I never had anything to do in the management of ISSSTE," Gordillo said.

That prompted Yunes to deny he had been taking orders from Gordillo.

"Around the month of February 2007, on one occasion she invited me to a meeting in San Diego at a hotel near her residence ... She asked that monthly I give 20 million pesos to finance the activities of New Alliance," Yunes said at a news conference. "Obviously, I said 'no.'"

Political analyst Jose Antonio Crespo said the allegations show that the old way of doing politics in Mexico hasn't changed even with ouster of the PRI.

He said that Calderon's National Action Party, "instead of trying to democratize the union, of confronting Elba Esther Gordillo ... adopted her, made a pact with her for political support and gave her what she wanted."

Gordillo was just 15 when she joined the National Education Workers Union, which served as a sort of electoral army for the PRI, which governed Mexico for 71 years. She followed the path of most Mexican politicians, rising through a series of union, party and government posts.

When a strike by dissident teachers led President Carlos Salinas to oust the old boss of the teacher's union in 1989, the job fell to Gordillo, who was widely seen as a reformer.

The union post made her one of the most powerful figures in the PRI at a moment when democratic reforms were starting to erode the party's hold on power, as well as its unquestioning subservience to Mexico's president.

Even before the PRI lost the 2000 election to National Action Party's Vicente Fox, Gordillo began hedging her bets. She participated in a high-profile discussion group that included prominent social activists and opponents of the government, including Fox. Her friendship with Fox infuriated some PRI officials, who managed to prevent her from becoming leader of the party in 2005. She was later expelled from the party in 2006 for supporting other parties' candidates and the formation of the New Alliance.

Critics accused her of amassing more than a dozen properties with millions of dollars. She has acknowledge some of the wealth, saying part was inherited. The newspaper Reforma last week analyzed one of her outfits, noting she was carrying a $5,500 purse and wearing $1,200 shoes.

Even while holding senior posts in the PRI, she was universally seen as the guiding force behind the creation of the New Alliance Party, which was based on members of the teacher's union and is headed by one of her daughters.

The party, along with the vast spread of the teacher's union itself, gives Gordillo special leverage. Because it is large enough to swing votes from one large party to another, rivals negotiate for its backing. New Alliance backed the PRI in some recent governors elections, while supporting National Action coalitions in others.

The PRI's national leader and former teacher, Humberto Moreira, last week refused to rule out an alliance with Gordillo in 2012's presidential race, and he was quickly criticized other party leaders who see her as a turncoat.

Crespo said the mutual allegations hint at the role New Alliance will play next year. "It is being put up for sale, for auction, to see which of the possible winners will offer the most."

The Associated Press contributed to this report.