Mexico arrests head of teacher's union on fraud charges

By Gabriel Stargardter

MEXICO CITY (Reuters) - Mexico arrested the powerful head of the main teachers' union on fraud and embezzlement charges on Tuesday, striking out at a high-profile opponent of the new government's reform efforts and seeking to assert President Enrique Pena Nieto's authority.

Attorney General Jesus Murillo said Elba Esther Gordillo was arrested on suspicion of embezzling $200 million of union funds, laying out the case against her just a day after Pena Nieto signed into law a major education reform that Gordillo opposed.

Gordillo is accused of using intermediaries to move money to bank accounts in Switzerland and Liechtenstein, then back to the United States, in order to buy property in San Diego and pay for works of art and plastic surgery.

"Clearly, we're facing a case in which the money of education workers has been misused illegally for the benefit of various people, including Elba Esther Gordillo," Murillo said. "Under this government nobody is above the law."

Gordillo, 68, is known as the "The Teacher" in Mexico. She has led her union for more than two decades and was long a prominent member of Pena Nieto's centrist Institutional Revolutionary Party, or PRI.

She also became a symbol of alleged corruption in the country, drawing widespread criticism for her expensive clothes and lavish lifestyle.

Murillo said she used union money to pay bills of $3 million at luxury U.S. department store Neiman Marcus. Detailing the charges against her, Murillo said she had declared income of just 1.1 million pesos ($86,000) between 2009 and 2012.

He said other people involved in the suspected fraud included Gordillo's dead mother, the 99 percent owner of one of the companies used to move funds.