Slim’s chance to change his legacy

By Helen Coster

updated 5:20 p.m. ET March 9, 2007

Editor's note: This story has been corrected from an earlier version.

Carlos Slim Helú of Mexico, the industrial titan whose holdings span telecom, banking, energy, tobacco and more, has built unimaginable wealth in one of the poorer countries in the Western Hemisphere. In the past year his fortune, now approaching $50 billion, has grown by $19 billion, an increase that eclipses any gain by any other billionaire in the past decade. He reigns as the third-richest person in the world on the 21st annual Forbes billionaires list. Slim (both his family surname and his nickname) is tantalizingly close to surpassing the wealth of the storied Oracle of Omaha, Warren Buffett, the sage investor who has been number two to his protégé and pal, Microsoft's Bill Gates, since 2001.

Slim, 67, amassed his pile in a nation where per capita income is less than $6,800 a year and half the population lives in poverty. His wealth comes to 6.3 percent of Mexico's annual economic output; if Gates had a similar chunk in the U.S., he'd be worth $784 billion. It's enough to give any populist heartburn.

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In Hong Kong, perhaps, or even Finland, Slim would be heralded as a striving champion of capitalism, a self-made billionaire celebrated for employing 218,000 workers and for pushing his country into the modern age. But not in Mexico, where the media and the masses long have held a sneaking suspicion that there is something shady about Slim. He is decried as a rapacious monopolist who built his empire on cozy ties to Mexican presidents and other politicians.

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Last year a cartoon in La Reforma, a center-right newspaper, depicted an oversize Slim in a boxing ring, splayed on his back and squashing a tiny opponent. The ring ropes were phone lines, an allusion to Slim's control of Telmex, with a 90 percent share of the landline phone business, and América Móvil, with a 73 percent share of the market for cell phone service. The caption: "Billion Dollar Baby." Slim has been pilloried on tv in La Verdad Sea Dicha ("Truth Be Told" ), a political-platform show from a defeated opposition-party candidate for president who had befriended, then betrayed Slim. In one segment a news anchor angrily shoves a pie into the mouth of a papier maché Slim, mocking him as a gluttonous, insatiable tyrant. Never mind that, in 40 years of business in Mexico, Slim isn't known ever to have been formally investigated, indicted, convicted or otherwise sullied in regard to bribery, influence peddling or any other scandal. For some in the working class here — the random cab driver, small-time actor, bellhop — Slim's fat-cat wealth is reason enough for suspicion.

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As the best-known patriarch among the ruling families that dominate the Mexican economy, he draws the most fire for the distinctly Mexican form of crony capitalism that pervades the national economy. The cement industry is largely controlled by one player — Cemex — and its billionaire chief, Lorenzo Zambrano. Mexico has two national television networks, run by the country's ruling elite — tv Azteca, run by Ricardo Salinas Pliego; and Grupo Televisa, controlled by Emilio Azcárraga Jean, favorite son of the Azcárraga clan. Even tortillas are a monopoly market, controlled by the González Barrera family's Gruma, which has a 71 percent share of sales. In January people protested in the streets of Mexico City after tortilla prices doubled.

"Mexico has a dense, intricate web of connections and personal ties between the government and the business class," says Denise Dresser, a Slim basher who teaches political science at Instituto Tecnológico Autónomo de México (itam). "This ends up creating a government that doesn't defend the public interest, that isn't willing to go out and regulate in the name of the consumer," she says. "But it is rather willing to help its friends, its allies and, in some cases, its business partners thrive at the expense of the Mexican people."

Slim insists he is unfazed by the criticism. "When you live for others' opinions, you are dead. I don't want to live thinking about how I'll be remembered." At one point in a three-hour interview in his yawning, unadorned office in a three-story building in a tony enclave in Mexico City, he produces prepared talking points to rebut the notion that he is a monopolist. Sample page: "There are actually 44 concessions that offer long distance, 26 for local service and 10 for mobile service ... Telmex is not a company that has monopolistic practices."

Does he protest too much? Some people who know him well say Slim stings from the carping — and that he intends to do something about it. "He's like everyone else. He doesn't like to be criticized. He's a sensitive person who wants to do the right thing," says AT&T Chairman Edward E. Whitacre Jr., who has known Slim since buying a 10 percent stake in Telmex in 1990 (the $1 billion investment turned into more than $10 billion). "I think he wants to be remembered as someone who did something good for his fellow man," Whitacre says.

Lately Carlos Slim has taken up a particular interest in philanthropy, a pursuit he had neglected for most of the years he was building his businesses. He formed a foundation 23 years ago and funded it with a few million, and it has done little since then. A year ago Slim infused it with $1.8 billion; in the fall he pledged to donate up to $10 billion to the foundation in the next four years to fund health and education programs.

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