Ben Hills with additional reporting by Simeon Tegel in Mexico City
In a spartan concrete room in a maximum security prison in Victoria, a man bizarrely dressed in a baby blue gown fastened at the back is struggling to explain why Australia, his newly adopted home, has locked him up, seized his property, and is trying to send him back to Mexico to face what he fears will be a political show-trial.
Carlos Cabal Peniche, to give him his full title, has been in Port Phillip Prison for two years fighting extradition over the $1.4 billion collapse of his business empire, and he believes at least part of his plight is due to public anger against another fugitive living a life of pampered seclusion on the Mediterranean island of Majorca.
Visiting the other day, his 15-year-old daughter Sophia cried as she told her father that her civics teacher at an exclusive Catholic girls’ school had asked the class if anyone knew who Christopher Skase was. One of her classmates had volunteered : “Yes. He’s the Mexican who’s in jail.”
Cabal looks as if he’s going to burst into tears himself. “I am paying for whatever Skase did here,” he says, his brown eyes welling with emotion. “I have done his time in jail, two years out of my life. All the anger at what he did has gone against me.”
“And Skase is living in luxury,” chips in Mike Smith, former editor of The Age, now chairman of IPR Shandwick, the high-powered public relations agency Cabal has engaged to handle his publicity.
“How would [Justice Minister] Amanda Vanstone look after all the fuss she made about Skase if Australia couldn’t deliver Carlos to Mexico?” he asks, rhetorically.
The parallels are certainly there: both fled their countries as their recently built billion-dollar corporations collapsed; both spent years on the run leaving bumbling investigators panting in their wake; both turned to the understanding folk of the Dominican Republic, an impoverished island in the Caribbean, when they needed passports; both wound up in jail halfway around the world from their homelands; both insist they are innocent.
But there the similarities between the celebrity runaways cease.
Skase, after spending a year in a Spanish prison, was released to his luxurious villa on Majorca, from which he sorties occasionally, brandishing his nebuliser like a talisman to ward off Australia’s extradition lawyers and creditors of his long-dead Qintex leisure group, with the help of accommodating Spanish judges.
Cabal, who has the twin misfortunes to be in good health and in a jurisdiction of the less sympathetic English system of law, languishes in a cell in Sirius East, the wing of the prison housing some of Victoria’s most feared and reviled criminals. Of his countless court appearances, strip-searched and shackled in chains, he has lost every one.
FLASHBACK to 1994. Carlos Cabal, the boardroom face of the new Mexico, is aged 37 and at the height of his powers. He has with the encouragement of former president Carlos Salinas de Gortari put together a syndicate of businessmen from Mexico’s impoverished though oil-rich State of Tabasco to buy two banks which the government has privatised, and has organised the takeover of the Del Monte corporation, one of the world’s biggest traders in pineapples and bananas.
The Cabals are not from Mexico’s old, connected, business aristocracy, though they are not peasants, either. Grandfather owned a grocery shop, father built it into a supermarket chain, and young Carlos, smart, suave and handsome, had been groomed to succeed he studied business administration at a prestigious university in Mexico, then furthered his education in Canada and England. As well as Spanish, he speaks fluent English, French and Italian.
Anyway, that summer, Cabal is holidaying in Switzerland with his wife Teresa and their four children. He turns on CNN on the hotel TV and is astounded to see footage from Mexico of government agents raiding the Banco Union of which he is chairman, to see his employees hustled away for questioning, and to learn that charges have been laid against him and he is a fugitive from justice.
As the bank collapses into bankruptcy, Cabal is charged on 26 counts, alleging offences against banking laws, fraud, money-laundering and tax evasion. The total amount involved is $US232 million, $US100 million of which is alleged to have been diverted into an account controlled by Cabal and used for personal purposes.
For more colourful details of his life, his career, his business philosophy, and his version of the charges against him, check the Web site (www.carloscabal.com.au) that Smith has set up to tell Cabal’s side of the story. It’s a ripping yarn begging for a Hollywood offer, “… a story involving billions of dollars, political deals, corruption, murder, double-crossing and international politics”.
Cabal is convinced the charges are a set-up designed to make him the scape-goat for Mexico’s pending economic meltdown later that year, which brings the country to the brink of collapse, and eventually costs taxpayers $US100 billion. In fact, that is precisely what his nemesis, the Mexican head of Interpol, Miguel Ponce Edmondson, is later quoted as saying.
“[Cabal] is the most wanted man in the modern history of Mexico,” he said, with scant regard for whatever passes as contempt of court in Mexico, “not only for the crimes he has committed, but because he has been condemned by society as the cause of the economic crisis that profoundly damaged the Mexican people.”
As well, Cabal knows where some bodies are buried. He has provided evidence of secret accounts at the banks through which tens of millions of dollars were funnelled to finance the PRI, the Institutional Revolutionary Party which ruled Mexico for nearly 80 years until its defeat earlier this year. Cabal believes his reluctance to help bankroll the defeated president, Ernesto Zedillo, was the reason the authorities were sooled onto his banks.
The PRI indignantly denies the charges, claiming that Cabal is just trying to cover up his crimes. The party takes out full-page newspaper advertisments headlined “Carlos Cabal Lies” to rebut his accusations of slush funds.
Guilty or innocent, Cabal decided not to return to face the music. For two years he and his family lived on the run in France, Spain, and Italy, before obtaining Dominican Republic passports in false names, and travelling to Australia. They intended to stay 12 months four years later they are still here, clinging by the fingernails to the letter of the Australian law.
PORT Phillip Prison, one of Australia’s first privately operated jails, is a low-lying huddle of buildings surrounded by a concrete wall in the dreary industrial wastelands west of Melbourne. In a report by the Human Rights and Equal Opportunity Commission, which recently upheld Cabal’s complaints that conditions there breach Australia’s international treaty obligations, it is described as “a place which resonates with claustrophobia and depression”.
In the three years since it opened, four prisoners have hanged themselves, and one has died of a drug overdose. There was a riot last year, and an audit discovered disturbing evidence of drugs, knives and other contraband, assaults on poorly trained staff, and a culture of fear and intimidation.
Cabal says he lives in fear of his fellow inmates in Sirius East, who have included Gregory Allan Brown, serving 16 years for murder and arson over the 1989 Downunder Hostel fire in Sydney in which six people died; Kenneth Stanley Rogers, a pedophile serving 11 years on 57 counts of sexual abuse of children over a 30-year period; and other murderers, rapists, drug dealers and armed robbers.
“I have been trying to get along with them,” he says during our 90-minute social visit. “If they ask me for some favour I try to do it if they want legal help, or to borrow some money.”
To visit Cabal and he has had an extraordinary 4,000 to 5,000 visitors you have to surrender your property (bar a few coins for the soft-drink machines, nappy wipes, and one unopened packet of cigarettes), place your hand in a strange machine the guard says measures your bone density, and guarantee not to embrace the prisoner you are visiting in a way which might offend public decency.
Cabal has been held in prison for two years now, since Australian Federal Police pounced on him as he returned from a jog to the rented house in the Melbourne bayside suburb of Brighton where he and his family had been living for two years. Ponce, who had been pursuing him for four years, leered as he watched, and took photographs of an overweight and unshaven Cabal, which were splashed over Mexican newspapers and TV the following day.
Three Australian Federal Police officers were disciplined for their part in the circus which included one swearing a false affidavit and the magistrate at Cabal’s committal commented that the swarthy, thick-set Ponce was “a person who does not have regard for due process of law, and behaves in a manner more consistent with a standover man than an investigator”.
Although Cabal’s money could buy him the best defence and the best PR in Australia, it has not been able to buy his freedom. The courts have even turned down an extraordinary offer Cabal made to turn his home into a private prison for himself and his family, spending $600,000 on laser beams, surveillance, and a special vehicle to take him to and from court.
Cabal counts off on his fingers the $5,000-plus-a-day QCs who have fought for him in just about every Australian jurisdiction bar the Court of Disputed Returns. It is a veritable Who’s Who of the Bar: David Galbally, Robert Richter, Michael Rozenes, Philip Dunn, Kevin Bell, Julian Burnside.
It is already, by a country mile, the longest, most expensive and most keenly contested extradition case in the country’s history. The initial hearing alone, in the Melbourne Magistrate’s Court, took 69 days. Since then there have been more than 20 cases before the Federal Court, and the Victorian Supreme Court next week the case reaches the top of the legal food chain when it goes before the High Court.
And he has lost every fight that matters. His only victories have been at the margins: overturning an order seizing some property (though not his wife’s jewellery and his children’s rosaries, which remain confiscated), and that ruling by HREOC that Australia was violating its obligations under the UN treaty governing the treatment of prisoners.
So it is legitimate to ask Cabal how if he is innocent, as he says he has been able to fund this elaborate defence. Out of $US6 million the Mexican Government had to pay him, after he left Mexico, for some shares in the Del Monte company plus the proceeds of the sale of some property in his home State of Tabasco, he says.
“But now it is coming to an end,” Cabal says, claiming he has already spent $US3.5 million on his defence, and grumbling at the strange Australian system where you have to pay for three lawyers (QC, junior counsel, and instructing solicitor) instead of one, as back home in Mexico.
Although Cabal says he is going to press ahead with his legal challenges in Australia and Mexico, he recognises that he is running out of options, and may eventually have to return to test whether democracy and the rule of law have really been established, following the election of Vicente Fox the new regime takes office on December 1.
“Yes, of course, I don’t have much doubt I will end up fighting the charges in Mexico,” says that country’s most famous fugitive, “but I will defeat them, all the charges, because they are baseless.”
Pu bdate: Tuesday 21 November 2000
Section: News And Features
Sub section: Insight
Word count: 2092
Classification: Crime/Fraud People/Name/Cabal/Carlos
Geographic area: Mexico Vic
Photography: John Donegan
Caption: Family support …
1. Carlos Cabal’s wife Teresa, daughter Sophia and son Carlos jnr at Melbourne’s Magistrate’s Court.
2. Carlos Cabal in Port Phillip Prison. Will Burgess
3. House arrest … Miguel Ponce Edmondson outside the house in Brighton where Carlos Cabal had been living