Mexican union bureaucrat's $8.2-million Miami condo-buying spree exposed

Being a union official has been very, very good for Bernardo Quezada Salas.  How else to explain his and his family’s purchase of $8.2 million's worth of luxury condos in Miami?  Now a congressman in Mexico, Quezada Salas has quite the taste in luxury property, according to an exposé by Emily Michot in the Miami Herald.

On a single day in 2005, an official of Mexico’s powerful teachers’ union and his relatives spent $6.3 million on 11 luxury condos at a Brickell high-rise.

Bernardo Quezada Salas, now a congressman in Mexico, might have paid cash for the luxury units at the Espirito Santo Plaza. The deals were done through Florida companies owned by some combination of Quezada Salas, his wife, his sister-in-law and his brother-in-law.

The year before the Brickell deals, his wife, Jessica Peredo Rincon, had paid $1.1 million for a two-bedroom unit at the swanky Setai in South Beach. Then, in 2008, the couple bought a three-bedroom condo at a luxury tower in Sunny Isles Beach for $848,000.

The transactions — which do not seem to have been previously reported in the media — raise questions about how a union official like Quezada Salas and his family could afford so many expensive homes.

Perhaps a look at another official in the Mexican teachers union (STNE) will suggest an answer:

In 2013, Mexican authorities arrested STNE’s mighty president, Elba Esther Gordillo, for embezzlement and organized crime. They said Gordillo — a political power broker known as La Maestra ( “the teacher”) — and three top aides stole $200 million in union funds. The 71-year-old was accused of spending the money on shopping trips at Neiman Marcus, plastic surgery and waterfront mansions in San Diego, among other boondoggles.

Between 2002 and 2005, she also served as secretary general of the Institutional Revolutionary Party, which governed Mexico for most of the 20th century and is back in power today.

Since her arrest, Gordillo has spent her days mostly in a hospital suite attached to Mexico City’s Tepepan prison or at a private hospital in the capital. The slow-moving legal case against her inches forward but her real estate has not been seized. The charges are still pending.

“She has apartments in Paris and in Buenos Aires, and she has a huge mansion in Mexico City,” said Carlos Ornelas, an expert on Mexico’s educational system who holds a doctorate from Stanford.

A corrupt union official in bed with a powerful political party.  Could never happen here, right?

Actually, this pattern of wealthy and sometimes corrupt foreigners stashing money in American property and pushing up housing prices has direct implications for the lives of Americans.  As Sierra Rayne points out today, the loss of affordability for housing is having a dramatic affect on the welfare of ordinary Americans, as housing prices have skyrocketed out of reach for middle-income families in many cities.  The Herald knows what has happened in Miami:

The Miami Herald recently reported on how questionable funds from abroad helped fuel the stratospheric rise of South Florida’s real-estate market. A data breach at Panamanian law firm Mossack Fonseca allowed journalists to sift through 11.5 million secret documents, the so-called Panama Papers, and trace a string of offshore shell companies investing in local homes. Many of the companies were controlled by people accused of corruption or other wrongdoing. (snip)

While the wave of foreign cash has boosted property tax revenue and created jobs, it has also driven housing prices out of reach for many locals. South Florida is now one of the least-affordable housing markets in the United States.

Note that governments profiteer from this housing inflation, as high prices drive real estate tax revenues.  And taxes on the sale of properties.

As a friend on mine comments:

This of course is part of a major problem -- corrupt and filthy rich foreigners from Third World dumps and kleptocracies buying up property in the U.S. and driving up real estate prices, and often remaining unaccountable because they often use shell companies to make their purchases. Another example of how the U.S.'s openness is helping to destroy its culture from inside out...

Hat tip: David Paulin

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