Cabal v United Mexican States (No 3)

[2000] FCA 1204

FEDERAL COURT OF AUSTRALIA

Cabal  v United Mexican States (No 3) [2000] FCA 1204

EXTRADITION – review of determination of eligibility for surrender by magistrate – nature of review process – nature of function conferred on magistrate and court – constitutional validity – Extradition Act 1988 – approach to construction – construction by reference to rules of construction for international treaties – ordinary meaning of words and purpose of statute – request for extradition – supporting documents – no inquiry into foreign law – criteria for characterisation of documents issued by requesting country as “warrants” – ordinary meaning – due authentication – whether required for translations accompanying supporting documents under treaty provisions – sealing - whether one seal covers multiple documents – signing and certification – apostilles under Hague Convention – translation – where required – whether partial translation of warrants sufficient – translation of statements of offences, penalties and conduct – reliability – legibility of supporting documents – what constitutes a “copy” – partial illegibility – statement of conduct – sufficiency – more than one offence in a statement – whether specific allegation of conduct to offence required – double criminality – Extradition Objections – purpose of prosecution or punishment for political opinions – purpose – political opinions – assessment on premise that offences committed – substantial grounds – what is necessary to establish – prejudice – on account of political opinions – exclusion of material by magistrate – judicial review of magistrate’s decision – whether subsumed in s 21 review.

CONSTITUTIONAL LAW – separation of powers – review by Court of magistrate’s administrative decision – whether exercise of judicial power – nature of review.

WORDS AND PHRASES “review”, “duly authenticated”, “sign”, “certify”, “seal”, “substantial grounds”, “political opinions”.

Extradition Act 1988 s 3, s 12, s 16(1), s 19, s 21, s 22, s 5, s 6. S 7, s 10(2), s 10(3), s 11, s 46
Extradition (United Mexican States) Regulations 1991 reg 4, reg 5
Judiciary Act 1903 (Cth) s 39B(1A)
Extradition (Foreign States) Act 1966
Federal Court of Australia Act s 35(6)
Criminal Federal Procedure Code Article 25

Bertran v Vanstone (2000) 173 ALR 63
Harris v Attorney-General (Cth) (1994) 52 FCR 386 cited
Wiest v Director of Public Prosecutions (1988) 23 FCR 472 cited
Director of Public Prosecutions (Cth) v Kainhofer (1995) 185 CLR 528 followed, discussed
Zoeller v Federal Republic of Germany (1989) 23 FCR 282 cited, followed
Todhunter v United States of America (1995) 57 FCR 70 cited
Papazoglou v Republic of the Philippines (1997) 74 FCR 108 cited
Brandy v Human Rights and Equal Opportunity Commission (1995) 183 CLR 245 cited
Bannister v See (1982) 42 ALR 78 cited
Colpitts v Australian Telecommunications Commission (1986) 9 FCR 52 cited
Builders Licensing Board v Sperway Construction (Syd) Pty Ltd (1976) 135 CLR 616 cited
Phillips v Commonwealth (1964) 110 CLR 347 cited
Aston v Irvine (1955) 92 CLR 353 cited
Woss v Jacobsen (1985) 60 ALR 313 cited
Sheahan v Joye (1995) 57 FCR 389 cited
State of Western Australia v Strickland [2000] FCA 652 cited
Powder Family v Registrar, National Native Title Tribunal [1999] FCA 913 discussed
Abebe v Commonwealth (1999) 162 ALR 1 cited
Kainhofer v Director of Public Prosecutions (No 2) (1996) 70 FCR 184 followed
Republic of South Africa v Dutton (1997) 77 FCR 128 discussed
Cabal v United Mexican States (No 2) (2000) 172 ALR 743 discussed
Cominos v Cominos (1972) 127 CLR 588 followed
R v Quinn Ex parte Consolidated Foods Corporation (1977) 138 CLR 1 cited followed
Federal Commissioner of Taxation v Munro (1926) 38 CLR 153 cited
R v Trade Practices Tribunal; Ex parte Tasmanian Breweries Pty Ltd (1971) 123 CLR 361 cited
Precision Data Holdings Ltd v Willis (1991) 173 CLR 167 cited
R v Davison (1954) 90 CLR 353 cited
Victorian Stevedoring and General Contracting Co Pty Ltd and Meakes v Dignan (1931) 46 CLR 73 cited
Trimbole v Dugan (1984) 3 FCR 324 cited
Dutton v Republic of South Africa (1999) 84 FCR 291 discussed
Queensland v Commonwealth (1989) 167 CLR 232 cited
Koowarta v Bjelke-Petersen (1982) 153 CLR 168 cited
Yager v R (1977) 139 CLR 28 cited
Polites v Commonwealth (1945) 70 CLR 60 cited
Rocklea Spinning Mills Pty Ltd v Anti-Dumping Authority (1995) 56 FCR 406 cited
James Buchanan & Co Ltd v Babco Forwarding & Shipping (UK) Ltd [1978] AC 141 cited
The Shipping Corporation of India Ltd v Gamlen Chemical Co (A/Asia) Pty Ltd (1980) 147 CLR 142 cited
Fothergill v Monarch Airlines Ltd [1981] AC 251 cited
Riley v Commonwealth (1985) 159 CLR 1 cited
Minister for Foreign Affairs v Magno (1992) 37 FCR 298 cited
Applicant Av Minister for Immigration and Ethnic Affairs (1998) 190 CLR 225 cited
Re Bolton Ex parte Beane (1987) 162 CLR 514 cited
R v Horseferry Road Magistrates’ Court; Ex parte Bennett [1994] 1 AC 42 cited
Schlieske v Federal Republic of Germany (1987) 14 FCR 424 discussed, followed
Prabowo v Republic of Indonesia (1995) 61 FCR 258 cited
De Bruyn v Republic of South Africa (1999) 96 FCR 290 cited
Timar v Republic of Hungry [1999] FCA 1518 cited
Scott v Cawsey (1907) 5 CLR 132 cited
Beckwith v R (1976) 12 ALR 333 cited
Government of Belgium v Postlethwaite [1988] 1 AC 924 cited
Cheng v Governor of Pentonville Prison [1973] AC 931 cited
Government of Canada v Aronson [1990] 1 AC 579 cited
Zoeller v Federal Republic of Germany (1988) 19 FCR 64 cited
Harris v Attorney-General (Cwth) (1994) 52 FCR 386 discussed, followed
Ichiyo Ujiie v Republic of Singapore  (unrep Fed Court 18/10/95 Wilcox J) cited
Timar v Republic of Hungry [2000] FCA 755 followed
Kainhofer v Director of Public Prosecutions (No 1) (1994) 52 FCR 341 cited
Federal Republic of Germany v Parker (1998) 84 FCR 323 cited
Haddad v Larcombe (1989) 42 A Crim R 139 cited
Federal Republic of Germany v Haddad (1990) 21 FCR 496 cited
McDade v The United Kingdom [1999] FCA 1868 followed
Prevato v Governor, Metropolitan Remand Centre (1986) 8 FCR 358 cited
Prabowo v Republic of Indonesia (1997) 74 FCR 599 cited
R v Bow Street Magistrates’ Court; Ex parte Vandenholst (1986) Cr App R 114 cited
Ex parte Bennett; re Cunningham (1966) 68 SR(NSW) 15 cited
R v Evans [1994] 1 WLR 1006 cited
Jahazi v Minister for Immigration and Ethnic Affairs (1995) 61 FCR 293 cited
State of Wisconsin v Armstrong (1973) 10 CCC 2d 271 cited
Stanton v Republic of the Philippines (unrep Fed Court 12/1/93) cited
R v Governor of Pentonville Prison  Ex parte Teja (1971) 2 QB 274 discussed
Nationwide News Pty Ltd v Wills (1992) 177 CLR 1 discussed
Australian Capital Television Pty Ltd v Commonwealth (No 2) (1992) 177 CLR 106 discussed
Theophanous v Herald & Weekly Times Ltd (1994) 182 CLR 104 discussed
Brown Re Classification Review Board (1998) 82 FCR 225 cited

Pearce and Geddes, Statutory Interpretation in Australia, 4^th Edition, Butterworths (1996) at 2.23, 9.7
Aughterson, Extradition – Australian Law and Procedure, Law Book Co, 1955 pp 20-24
Corpus Juris Secundum, Vol 35

CARLOS CABAL PENICHE and MARCO PASINI BERTRAN v UNITED MEXICAN STATES, LISA HANNAN and COMMONWEALTH OF AUSTRALIA
V 728 of 1999

FRENCH J
29 AUGUST 2000
PERTH (Heard in Melbourne)

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	V 728 OF 1999

BETWEEN:

CARLOS CABAL PENICHE
FIRST APPLICANT

MARCO PASINI BERTRAN
SECOND APPLICANT

AND:

UNITED MEXICAN STATES
FIRST RESPONDENT

LISA HANNAN
SECOND RESPONDENT

COMMONWEALTH OF AUSTRALIA
INTERVENING

JUDGE:

FRENCH J

DATE OF ORDER:

29 AUGUST 2000

WHERE MADE:

PERTH (Heard in Melbourne)

THE COURT ORDERS THAT:

1.The decision of the First Respondent made on 17 December 1999 that the First and Second Applicants are eligible for surrender to the United Mexican States in relation to the offences set out in Annexure 1 and 2 to this order is confirmed.

2.The application for judicial review is dismissed.

3The Applicants are to pay the Second Respondent’s costs of the application.

4.Liberty to the Commonwealth of Australia to apply within fourteen days on the question of costs of its intervention on the Constitutional point.

Note:   Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

ANNEXURE 1

EXTRADITION OFFENCES IN RELATION TO WHICH CARLOS CABAL IS ELIGIBLE FOR SURRENDER TO THE UNITED MEXICAN STATES

·     Being an employee and officer of a credit institution who authorised transactions, being aware that such transactions will result in loss to the institution to which he renders his services, contrary to Article 112 section V of the Law of Credit Institutions of Mexico (6 counts);

·     Being an employee and officer of a credit institution who granted credit to individuals or corporations whose insolvency condition is known to him, if it is foreseeable, at the moment of the execution of the transaction, that the individual or corporation lacks the financial capacity to pay or who is responsible for the total of the credited sums, deriving in economic loss to the institution, contrary to Article 112 section V(c) of the Law of Credit Institutions of Mexico (5 counts);

·     Being an employee and officer of a credit institution who renewed partially or totally overdue credits to individuals or corporations referred to in Article 112 section V(c) of the Law of Credit Institutions of Mexico, contrary to Article 112 section V(d) of the Law of Credit Institutions of Mexico (4 counts);

·     Being an employee and officer of a credit institution who knowingly allowed a debtor to divert the total of the credit to his own benefit or that of third parties, and as a consequence, resulted in economic detriment to the institution, contrary to Article 112 section V(e) of the Law of Credit Institutions of Mexico (5 counts);

·     Being an employee and officer of a credit institution who intentionally omits to register transactions carried out by the institution or who alters the registers so as to conceal the true nature of transactions carried out thereby affecting the state of the assets, liabilities contingent accounts or profits, contrary to Article 113 of the Law of Credit Institutions of Mexico (2 counts);

·     Being an employee and officer of a credit institution who either by himself or through an intermediary, unduly receives from his clients a benefit as a determining condition to carry out a transaction, contrary to Article 114 of the Law of Credit Institutions of Mexico (1 count); and

·     Fraud, contrary to Article 386 of the Federal Criminal Code in Matters of Common Law for the Federal District and in Federal Matters for the Republic of Mexico (3 counts);

·     Tax Fraud Comparable, contrary to Article 109 section 1 of the Federal Tax Code of Mexico (2 counts);

·     Falsely Declaring Losses, contrary to Article 111 section IV of the Federal Tax Code of Mexico (1 count);

·     Being an employee and officer of a credit institution who granted credit to individuals or corporations whose insolvency condition is known to him, if it is foreseeable, at the moment of the execution of the transaction, that the individual or corporation lacks the financial capacity to pay or who is responsible for the total of the credited sums, deriving in economic loss to the institution, contrary to Article 112 section V paragraph (c) of the Law of Credit Institutions of Mexico (1 count); and

·     Money Laundering, contrary to Article 115 Bis section 1 paragraph (b) of the Federal Tax Code of Mexico (1 count).

ANNEXURE 2

EXTRADITION OFFENCES IN RELATION TO WHICH MARCO PASINI IS ELIGIBLE FOR SURRENDER TO THE UNITED MEXICAN STATES

·     1 count of wilfully helping Carlos Cabal Peniche to commit the following crime: being an employee and officer of a credit institution who granted credit to individuals or corporations whose insolvency condition is known to him, it if is foreseeable, at the moment of the execution of the transaction, that the individual or corporation lacks the financial capacity to pay or who is responsible for the total of the credited sums, deriving in economic loss to the institution, contrary to Article 112 section V(c) of the Law of Credit Institutions of Mexico in connection with Article 13, section VI of the Federal Criminal Code in Local Matters for the Federal District and in Federal Matters for the Republic of Mexico;

·     1 count of wilfully helping Carlos Cabal Peniche commit the following crime: being an employee and officer of a credit institution who knowingly allowed a debtor to divert the total of the credit to his own benefit or that of third parties, and as a consequence, resulted in economic detriment to the institution, contrary to Article 112 section V(e) of the Law of Credit Institutions of Mexico in connection with Article 13, section VI of the Federal Criminal Code in Local Matters for the Federal District and in Federal Matters for the Republic of Mexico; and

· 1 count of concealment contrary to Article 400, section II of the Federal Criminal Code in Local Matters for the Federal District and in Federal Matters for the Republic of Mexico.

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	V 728 OF 1999

BETWEEN:

CARLOS CABAL PENICHE
FIRST APPLICANT

MARCO PASINI BERTRAN
SECOND APPLICANT

AND:

UNITED MEXICAN STATES
FIRST RESPONDENT

LISA HANNAN
SECOND RESPONDENT

COMMONWEALTH OF AUSTRALIA
INTERVENING

JUDGE:	FRENCH J
DATE:	29 AUGUST 2000
PLACE:	PERTH (Heard in Melbourne)

REASONS FOR JUDGMENT

Introduction

1. On 11 November 1998, Carlos Cabal Peniche and his brother-in-law, Marco Pasini Bertran, were arrested in Melbourne by the Australian Federal Police following requests for their extradition, received by Australia from the United Mexican States.  The offences for which the extradition is sought relate to breaches of Mexico’s Law of Credit Institutions in connection with the affairs of a bank called Banco Union, of which Cabal was Chairman.  Large sums of money, including one individual amount of $US100 million were said to have been involved.  The provisions of Mexican law allegedly breached relate to improper or fraudulent conduct by officers and employees of credit institutions. 

2. The endeavour by Mexico to extradite Messrs Cabal and Pasini has led to substantial litigation.  The primary extradition hearing before Her Worship, Ms Hannan SM, occupied  sixty nine days of evidence and argument.  The proceedings in this Court upon review of that decision, occupied eight days of argument, the written submissions, evidence, exhibits and other materials put before the Court occupying some sixty five substantial files.

3. The guilt or innocence of Messrs Cabal and Pasini has not been in issue before the magistrate or before this Court on review.  Nor is it a matter which either the magistrate or this Court can determine in these proceedings.  That will be a matter for the Mexican courts in the event that the applicants are surrendered to Mexico.  What has been raised is a substantial number of objections to the surrender including the following:

   1.That the Extradition Act 1988 is unconstitutional.

   2.That documents said to be warrants for the arrest of Cabal and Pasini under Mexican law, are not warrants.

   3.That the translations of the Spanish language documents supplied by Mexico to the Australian Government and the Spanish language documents themselves were not duly authenticated – not being sealed and signed or certified as required by the Act.

   4.The translations provided were partial or unqualified or unreliable.

   5.The documents provided by Mexico were illegible or incomplete.

   6.The statements of conduct alleged against the applicants did not comply with the requirements of the Extradition Act.

   7.The surrender of the applicants is sought in order to prosecute them for their political opinions and if surrendered they may be prejudiced because of those opinions.

   In addition, the magistrate is said to have erred in various ways by failing to take into account relevant material, evidence and submissions and by applying wrong legal tests.

4. For the reasons which follow, I am satisfied that the magistrate’s decision should be confirmed.  None of the objections taken by the applicants is sustained.  This does not involve any finding as to the guilt or innocence of the offences alleged against them.

5. The reasons that follow begin with an outline of the factual background, including the history of events leading up to the issue of warrants in Mexico against Cabal and Pasini and their departure from that jurisdiction. This background draws in part on some material contained in Cabal’s proof which was submitted to the magistrate but not all of which was permitted to be led in evidence.  It is referred to as part of Cabal’s own account of his early commercial history.   The factual background generally does not canvass the conduct said to constitute the offences.  It does, however, provide some context for the contention by Cabal and Pasini that they are being prosecuted for their political opinions or that they may suffer prejudice on account of such opinions if surrendered to Mexico.

   Factual Background

6. Carlos Efrain de Jesus Cabal Peniche (Cabal) is a citizen of Mexico.  He describes himself as an entrepreneur.  He was born in 1956 in the south-eastern State of Yucatan at a place called Merida but grew up at Villahermosa in the State of Tabasco.  His father was a grocer.   Cabal went to primary school in Villahermosa from 1960 to 1967.  During that time his father became a significant local businessman.  He diversified his store, opened Tabasco’s first supermarket in 1965, a real estate business in 1966, a hotel in Villahermosa in 1967 and in the same year became President of the Chamber of Commerce. Cabal spent his last year of  secondary education at a Catholic school in Mexico City.  In 1974 he began studying for a degree in business administration in tourism at the Universidad Anahuac. 

7. Marco Pasini Bertran (Pasini) was born in Mexico City.  His sister, Teresa, is married to Cabal.  The Pasini family was involved in construction and steel smelting businesses started by his maternal grandfather who came to Mexico from Spain after the Spanish civil war.  Pasini went to University Novo Mondo from which he graduated in engineering in 1989.  For a couple of years after graduation he worked for a company involved in the production of pumps.  Subsequently he started his own franchise business called “Lasergraphics”.  This and similar businesses in which he became involved were successful. 

8. In 1976, the year in which Cabal met his wife to be, Teresa Pasini, his father’s business suffered from devaluation of the Mexican currency.  While still at University Cabal took over the running of his father’s chicken processing business in Mexico City.  When the Mexican economy improved in the course of what he called the “oil boom” years, he expanded and modernised the chicken business.  He acquired refrigerated transport trucks to provide fresh produce to Mexico City markets.   In 1977 he opened a new warehouse.  With that opening  he became a major chicken distributor in Mexico. 

9. Subsequently, however, with the growth of his business he suffered from what he called a “price war” initiated by a large competitor.  At one point his plant was closed by the Department of Health of the State of Guanajuato on the grounds that it was too close to a primary school.  He contends that the Department of Health was headed by a member of the family that owned his major competitor.  He eventually reopened the plant but had taken on a greater debt burden during its closure.  As a result of devaluations of the Mexican currency in 1982 his business debts, which were in US dollars, doubled and then trebled.  His father also experienced economic problems at that time.  In the event, Cabal says he had to close down his chicken business, his father sold their house in Mexico City and he returned to Tabasco.   In 1981 he was charged with issuing a cheque with insufficient funds and was arrested.  The charge was dismissed or withdrawn in 1984 following a change in the law. Cross-examination and documentary evidence tendered about this incident before the learned magistrate went to whether there had been a failure by Cabal to comply with conditions of bail while the charge was pending.  It was said to go to his credibility.  It has at best a marginal significance for these proceedings. 

1. Cabal claims that by the end of 1983 he had put in place repayment agreements with all of his outstanding business creditors and started work on some subdivision projects on two parcels of land free of any charges.  One parcel was in Yucatan and the other in Veracruz.  These subdivisions were successful so that by 1984 almost all of his creditors were repaid and he had some start-up capital for a new business venture.  He gives an account of his involvement in the shrimp business.  He made contact with co-operatives of shrimp fishermen in Campeche which is located between Tabasco and Yucatan.  He offered to incorporate a company in the United States that would buy shrimp direct from them.  He bought a plant on the Island of Ciudad del Carmen off the coast of Campeche and arranged for export of the produce to a company in Florida called Ladex Corporation, owned by a family of Cuban Americans.  However his first shipment was stopped at the border by Mexican authorities who claimed that he had inadequate documentation.  Cabal says he organised a meeting of all the co-operatives in Campeche, told them this was their only opportunity to become independent from the government monopoly buyer and to get better prices for their product.  The fisherman agreed to support him and, on his account of it, all 350 shrimp boats went on strike in support of the release of his shipment.  He negotiated with the relevant Minister of the Mexican Government who agreed to release his container on the basis that he would never organise another strike, that he would buy only a limited amount of shrimp and that if other co-operatives wanted to export through his company it would have to be subject to agreement with the principal wholesaler.  

2. In 1985, according to Cabal, he had reached the position that almost all co-operatives were selling to his company.  He opened two shipyards so that when fishermen arrived at port they could take their ships direct to the shipyards for urgent repairs.  He claimed that the operation was very efficient, the fishermen were happy and exports were increasing and he was employing around 400 people.  By 1986 his shrimp business had become one of the most important export industries of the region.  At or about that time he was visited by representatives of an investment banker called Rodrigo Rocha who was interested in investing in Mexico and particularly in the export business.  He made Cabal a good offer, which he accepted, for thirty per cent of his shrimp businesses.  Subsequently Rocha took over the whole of the business.

3. Cabal began looking for new business opportunities.  He became involved in banana production.  He acquired land in Tabasco and hired somebody knowledgeable in the business. He ran into industrial difficulties with unions.  These were not able to be resolved by negotiation.  He claims that the governor of Tabasco, Salvador Neme, became concerned that he would become too powerful to be controlled and tried to have him shut down by using the disruptive good officers of a union organiser, Isido Morales. Subsequently however through the intercession of Patrocinio Gonzales, the Govenor of Chiapas, Cabal’s relationship with the State government improved. 

4. The first containers of bananas from the plantations went to the United States in 1988.  The marketing vehicle was a company called Continental Fruit.  However the quality of the product delivered into the United States was affected by Cabal’s dependence on road transport over poor quality roads.  So he leased cargo ships to transport the produce by sea.  This involved reopening a port near Villahermosa called Frontera Port.  The arrival of the first ship and the reopening of the old port was, he said, an important political event.  He started getting invitations from the State Governor to attend conferences and meetings.  In 1988, Carlos Salinas was elected as President of Mexico.  

5. Cabal diversified from bananas to pineapples and papayas and subsequently began an export joint venture with other producers.  Under the joint venture agreement he would manage their plantations and they would receive a certain amount for each box of bananas produced from their land.  This was, he claims, the first partnership between different families in the south east and it was, in his view, a remarkable achievement to get them all to sit together at the same table.  He made technology transfer agreements with other growers and charged a commission on the sale of their bananas on the basis that his companies would harvest their product.  This enabled him to get enough bananas to keep the ships working.  He developed a close relationship with the Governor of Chiapas where he bought land to establish banana plantations.  He began travelling more to Chiapas to promote agriculture.  He claims to have had more and more contact with the ethnic Indian community in Chiapas, to have learned about the many serious problems facing them and the sorts of social and economic development that was needed to improve their living and working conditions.  By the end of 1989 Cabal said he had established a good relationship with the south-eastern governors, that is the governors of Tabasco, Chiapas and Campeche and other politicians in the region.  He had also, in his view, consolidated his relationship with his financiers, Eastbrook.  They had a thirty per cent equity in his plantation business.  By this time his third child was born.  He was running close to 10,000 hectares of banana plantations on land which he owned, land which he had access through joint ventures and land belonging to third parties.  These ventures employed about 20,000 people.  By this time, according to Cabal, he was the fifth largest exporter of bananas to the United States. 

6. Cabal entered into other export ventures including parquetry and marble.  He developed those businesses by importing technology from Germany and Italy and exporting the finished products to the United States.  He established training courses in the new technologies that he had brought into the region.  He became actively involved with the Catholic Church and in particular a French Priest who had come to Mexico seventeen years earlier.  The Priest was running a Foundation which was established to help poor priests in Mexico.  Cabal claims to have developed a concern about the people of the south-eastern States of Mexico.  He thought there was a need to develop that region of Mexico. One of the obstacles was the attitude of the business people there.

7. In 1991 President Salinas, visited the State of Campeche and through the intercession of the Governor of Campeche officially opened the parquetry plant.  This was the first contact that Cabal had had with the President.  He admired him for the way he had changed Mexico’s international image.  He knew of its improvement by virtue of his involvement with the US side of his operations.  He saw Salinas as trying to enhance Mexico’s international standing and participation in global markets by promoting the formation of companies and businesses that could compete internationally.  He also saw him as having been important in the establishment of a free trade agreement with the United States.  In 1990 Salinas had announced his intention to privatise Mexico’s banks.  At that time all of them were government owned.  Those which had been in private hands had been nationalised by President Portillo in the early 1980’s.  General rules governing the auctioning of the banks were published which set out decentralisation of banking services as one of the government’s objectives. (T 4451) At the opening of the plant on 13 June 1991, Salinas invited investors to participate in the privatisation program he had announced the previous year.  He encouraged Cabal and other businessmen to organise a group to buy a bank that could help finance development in the south-east.  Cabal took what he said seriously and organised a group to bid for one of the banks. 

8. Cabal gave evidence to the magistrate that at this time he had formed what his counsel described as “political beliefs”.  In summary these beliefs were as follows:

   1.He should have the right to work and develop his region free from any political interference or from vested interests including groups with political and economic power in the country.

   2.He had a right to an opinion as to the role of government in the growth of Mexico.

   3.He had a right to support or not support candidates for political office based on their policies.

   4.He was entitled to resist instructions from government when the instructions involved abuse or excess of power.

   These beliefs he conceded “might seem rather simple” but they “involved a number of difficulties when they were held in Mexico due to the way that country’s politics was conducted”.  There is no evidence of any public expression of these opinions prior to an open letter written by Cabal in November 1994 to which reference is made later in these reasons.

9. Cabal arranged a group of like-minded investors to tender for the acquisition of one of the banks, then known as Banco BCH.  His stated objective was to support investment and development in the south-east which had been of little interest to traditional money centres in the Centre and the North.  He registered his group of investors with the Mexican Ministry of Finance as prospective tenderers in about September 1991.  Two people with whom he had to deal in connection with that tender were the Under Secretary, Guillermo Ortiz (Ortiz), and the Minister himself, Pedro Aspe (Ape).  Cabal described Ortiz as a powerful man who effectively ran many areas of the Ministry of Finance and who was the official charged with carrying out President Salinas’ bank privatisation program. Both Aspe and Ortiz were described in evidence from Professor Roett, a Professor of International Relations at John Hopkins University as “classic technocrats”.  This was a term he used to describe senior public officials with degrees in planning economics obtained from leading United States universities.

10. On 11 October 1991, Aspe and Ortiz visited Tabasco in company with one Eduardo Creel.  They wanted to meet the south-east investors group.   Cabal met them at the airport.  Aspe introduced him to Creel whom he described as a person with experience in the financial sector.  After the meeting with the investors, Ortiz is said to have told Cabal to have a meeting with Creel to work out an agreement under which Creel could become part of the group so that he could participate in the bid for the bank.  Cabal gave evidence that the group of investors he assembled to bid for the bank had no previous experience in the banking industry and that they had always thought that professionals who had that experience would be in charge of managing the bank.  However it was elicited in cross-examination that Cabal was in fact a board member of a local bank (T4522), that one member of his group was president of the Regional Council for Bank Banpais in Tabasco (T4523), another member, Mr Naumann, was a member of the Regional Bank of Bancomer in Chiapas (T4523) and another, Mr Elek, had twenty years experience as Director-General of Citibank Mexico with great experience in the financial sector and had been an Assistant Director of the National Bank of Mexico (T4524-4525).

11. Cabal met with Creel in Mexico City on 14 October.  He concluded after the meeting that the objective of the proposal was for the Creel family to assume control of the bank.  Creel wanted to be Director-General of the Bank and his father-in-law to be Chairman.  It was Cabal’s intention and that of his group that the south-east investors should control the bank and avail themselves of professional assistance in technical areas.   He declined to take Creel in as a partner. On 7 November 1991, the day before the tender was submitted, he was asked by Ortiz to come and see him at his office in the Finance Ministry.    Oritz asked him how much he would be offering for the bank.  Cabal said that he and his group had considered offering 2.65 times the capital of the bank as at September 1991.  Ortiz said that Creel’s group was seen as the strongest group to purchase the bank and if Cabal didn’t win the tender he would probably have the opportunity to win a tender for a subsequent bank.  Cabal explained, however, that since his group was just beginning in the financial field it would be very difficult for him to keep it together if it didn’t win the tender.  In the event, on the following day, he tendered a higher figure than that which he had indicated to Ortiz, namely 2.67 times the bank’s capital.  When the tenders were publicly opened on 8 November, his was the highest.  On the following day he was called in again to meet with Ortiz.  Also present was Victor Miguel Fernandez, the Vice-President of the National Banking Commission.  Ortiz, he said, indicated “some great irritation” when Cabal entered the room asking why he had lied to him with regard to the price they were willing to offer.  Cabal said what he had quoted was an approximate amount and that on subsequent consideration after 7 November, he and his group had decided that the price actually offered was in fact the most suitable one.  Ortiz said he would have to consult with Aspe and the President as to what would be done.  When Cabal left the room Fernandez who accompanied him to the door, said that his offer was the highest. Creel’s offer was 2.66 times the bank’s capital.  The margin was very small and some deliberations would have to occur to see what was to happen.

12. At about midday on Sunday, 10 November, Cabal received a telephone call at home from Aspe who said words to the effect of “You might not believe this but you’ve won the bid”.  Aspe told him he should meet with Ortiz in the next few days to close the transaction which would be a matter of the signature and payment for the shares.  Creel was subsequently given a licence to establish a new bank in the south-east to compete with BCH Bank.  This was to be called the South-East Bank.

13. The tender for the BCH Bank was governed by specific bidding rules published in a document referred to in cross-examination as the “Official Diary of the Federation”.  The rules provided, inter alia, that if the two highest bids were within five per cent of each other then it was open to the National Banking Commission to award the tender to either bidder.  It was accepted by Cabal in cross-examination that the difference between his bid and Creel’s lower bid was less than five per cent.  So if the government had been determined to favour Creel over Cabal, it could have done so within the terms of the bidding rules. The suggestion that somehow Cabal had engendered some long term resentment on the part of government because of his tactics in relation to the bid appears to be without any foundation.

14. In March 1992, Cabal and his board were contemplating appointing a new managing director to the bank to replace the person who had been the incumbent at the time of purchase.  At a meeting he had about that time with Ortiz he informed him of their intentions.  Ortiz recommended that a Mr Reyes Retana, be appointed.  However the board of Banco Union, including Cabal, decided to appoint another candidate, Camberos.  When Cabal informed Ortiz of this decision at a meeting at the Bankers’ Club in Mexico City, he expressed great displeasure.  Cabal said it wasn’t a personal decision of his, but one made by the Board of Directors.  Ortiz said that he had had other plans for Camberos.  Ortiz told Cabal that he would have to get used to receiving and obeying instructions.  

15. The Bank undertook an aggressive program to open new branches, seven or eight in the south-east and in other states to give it a national presence.  It also relocated some other six branches throughout the country. One of Cabal’s first priorities was to invest in a modern computer system.  It was a major concern of his that the Bank should be connected on-line with all its different branches.  He met regularly with Ortiz although they were not friendly.  Ortiz insisted on being informed in advance of any proposed funding in any of the south-eastern states.  Cabal explained to Ortiz that he thought the Credit Committees of the Regional Boards should be able to decide whether the relevant state governments were in fact worthy of receiving credit.  Cabal said he did not comply with Ortiz’ request on all occasions, although if he were aware of a particular state credit, he might inform Ortiz.  In general however, he left it to the Credit Committees in each state.

16. In 1992, the United States fresh food conglomerate, Del Monte Fresh, became available for purchase.  Cabal promoted the possibility of an acquisition amongst other Mexican businessmen and, in particular, the National Finance Organisation.  On 6 August 1992, President Salinas attended a meeting at the Port of Dos Bocas in Tabasco with a group of businessmen, including Cabal, who were interested in undertaking the acquisition.  The price was of the order of $500 million.  It would be impossible for such a transaction to proceed without presidential blessing and the backing of the National Financiera and other financial interests.  Salinas seemed to be very interested so Cabal began to work on the process of putting together a bid.  On 20 August a consortium which he had assembled acquired Del Monte Fresh for half a billion dollars.  He was assisted by a Mr Cosio, appointed by the National Finance Organisation.

17. Shortly after the successful bid for that company Cabal attended the Eighth Banking Convention held in Acapulco from 23 to 26 August.  He was asked to make a presentation about the project to the bankers attending the Convention. In the course of that Convention Aspe who was attending it, found the opportunity to speak privately with him and told him that he must understand that the possibility of the Del Monte acquisition being successful was basically dependent upon the government support that he was receiving.  He was reminded of what Ortiz had previously told him, namely that he should be aware that he had to follow the instructions and follow the line, an expression which Cabal described as “very common in Mexico”.  The acquisition of the Del Monte company was finalised on or about 5 November 1992.

18. On 30 April 1993, a letter was sent to Banco BCH from the National Banking Commission of Mexico advising that the Commission wanted to undertake a routine audit under Article 123 of the Credit Institutions Act. (T 4544)  An audit was carried out and on 27 July 1993 a letter sent to the Bank advising of irregularities. (T 269/T4547)  The letter was marked for the attention of Mr Jamie Collantes Ortega, the Director-General of the Bank. According to Cabal, Collantes did not raise the letter with him.  In June 1993, the Bank’s name was changed from BCH to Banco Union.

19. In late June or early July 1993, Ramundo Florez, Chairman of the Board of Banca Cremi, called Cabal to discuss the possibility of merging the two banks.  He asked him to gather together a group of shareholders in Banco Union who might be capable of purchasing a ninety per cent interest in Banca Cremi.  The object was to purchase the Cremi Finance Group, which included Banca Cremi. Because of the magnitude of the proposed acquisition which involved about $550 million, it would require the approval of the President and of the Finance Minister, Aspe.  In August 1993, Cabal and his connections presented a proposal to Miguel Monserra, the Director of the Bank of Mexico.  Cabal himself met again with President Salinas to discuss the transaction on 31 August 1993.  Approval was granted for the purchase of Banca Cremi and that purchase took place in November 1993.  Subsequently Cabal tried to obtain necessary approvals for the merger and float of the two banks.

1. In 1993 there was a presidential election due in Mexico.  For nearly seventy years the country had been governed by one party, the Institutional Revolutionary Party (PRI).  It is only since 1997 that opposition parties have been represented in the Mexican Congress.  The position of president was one of considerable power, described by Professor Roett as “all powerful”.  The President was said to control all appointments to public office including the effective nomination of his successor.  The latter was a process called Dedazo. (T1828)

2. The three leading candidates for PRI endorsement as its candidate to succeed President Salinas were Pedro Aspe, Luis Donaldo Colosio and Manuel Comacho.  Colosio was the Minister of Social Development.  He was responsible for programs which brought basic facilities to many Mexicans.  Cabal had been introduced to Colosio in 1992 by the Governor of Chiapes, Patroccinio Gonzalez.  Colosio was at that time implementing social programs in that State.  He told Cabal then and also in 1993, of his social policies.  These centred around encouraging self-sufficiency and wealth creation by providing education and training for people.  He also supported equitable development of the regions in Mexico and the creation of a true multi-party democracy.  He wanted to limit the power of the President.  All of these policies were attractive to Cabal. (T4269)  Cabal described Colosio in his evidence as “…a very pleasant person, a very simple person, a very humble person” and a popular candidate with the people of Mexico.  He was a person of both Spanish and indigenous blood and in that sense, according to Cabal, “a common Mexican”. 

3. Towards the end of June 1993 Cabal was visited by Senator Carlos Salez Guteriez seeking a contribution to the PRI for the presidential election.  He says he agreed to arrange for contributions totalling $US15 million.  He told Guteriez that he was willing to do so in the belief that Colosio would be the endorsed candidate. He gave instructions to Collantes, the then Managing Director of Banco Union, that he should make an arrangement with PRI officials to open up a trust account in the bank and that he should endeavour to organise the shareholders and partners in the bank so that the necessary funds could be placed into that trust.  A trust deed was created for that purpose.  The donation was made on or about 26 July 1993. Cabal did not regard the amount as significant when compared with the standard contribution which was in excess of $US25 million.

4. On 20 November 1993, Collantes resigned from the Bank.  He died about a month later.  On 30 November 1993 there was a meeting of a committee referred to in evidence as the Board of Administration of the Bank.  A minute of the meeting was translated in cross-examination by Alberto Zinser, Cabal’s principal Mexican lawyer who appeared as a witness in the s 19 proceedings.  At that meeting a proposal was put for the creation of a Management Committee that would be the administrative and executive organ responsible for the day to day operations of the Bank. (T2714)  It would also be in charge of the direction and administration of the Cremi Financial Group and Banca Cremi.  The proposed committee was to be subject to the direction of the Board of Administration of Banco Union.  It was to comprise the most senior officers of the Bank.  It would function as a high level Credit Approval Committee with power to approve credit to what was described as “the maximum legal limit” based on the net capital of the borrower.  In the case of corporations this was thirty per cent of their capital and in the case of individuals, ten per cent. (T2716)  There was apparently already in existence at this time a High Credit Committee of Banco Union.  Cabal, who was to be a member of the proposed committee, was to have a casting vote.  Other members of the committee included Mr Robert Bailey as President, Joaquin Alcala Herroz, Ricardo Armas Arroyo, Guillermo Barboso, Garza Alfredo Castaneda Breton and Ernesto Malda Maza. (T2719)    Robert Bailey was an American banker whose services had been engaged by Banco Union with a view to effectively managing the post-merger financial group.   Cabal explained that he wanted Bailey to take charge of the post-merger financial group but given the requirement the General Manager be a Mexican citizen, the Management Committee was formed under Bailey’s chairmanship with Alcala acting as the General Manager of the Bank.

5. Colosio was endorsed as the official PRI presidential candidate on 8 December 1993.  Cabal says he was the first businessman to go and congratulate him.  He had agreed to support Colosio’s campaign. He provided him with a house where he could make appointments, conduct meetings and carry out his campaign.  He also gave him transport assistance and organised meetings of south-eastern businessmen.

6. Colosio’s campaign co-ordinator was Ernesto Zedillo.  At a meeting with Zedillo at the beginning of 1994, Cabal offered additional support to Colosio’s campaign to the value of $US5 million. His assistance to Colosio extended to accompanying him on a tour to Tabasco at the end of February 1994 and on part of his tour in the north-east of the country.  In the course of their travels they had conversations about Colosio’s plans for Mexico.  As Cabal put it “…. he wanted Mexico to have a true democracy and he wanted to improve the standard of living of Mexicans in general”.  He was very worried about the concentration of the population in Mexico City and wanted to promote decentralisation of powers and redistribution.  On 23 March 1994, however, Colosio was assassinated.  As a consequence Salinas nominated another successor, in this case Ernesto Zedillo. 

7. Following Zedillo’s endorsement as the new presidential candidate, Cabal met with Oscar Espinosa, Finance Secretary for the PRI, on 13 April 1994.  Espinosa asked him to make good his offer of $US5 million which he had previously mentioned to the campaign co-ordinator.  Cabal explained that the candidate had changed.  It was now Mr Zedillo.  Moreover the economic situation wasn’t so good.  He asked for a few days to see what he could do to organise the additional donation.  On 20 April 1994 in the course of a visit to Mexico by Cabal’s Japanese partners in Del Monte Fresh, he met with President Salinas in Loz Pinos.  Salinas asked him to support Zedillo.  He indicated that Cabal should provide financial support because it was mid campaign. 

8. On 29 April 1994 a letter was sent by Jose Camargo Ascencio, Director General of Supervision of the National Banking Commission to Banco Union.  The letter was marked for the attention of Robert D Bailey as President of the Committee of Direction of the Bank.  The letter referred to certain irregularities and allowed the Bank five days to explain what it intended to do about them.  Cabal said that as far as he could remember Bailey had never said to him that he had received such a letter. (T4548) 

9. At the beginning of May 1994, Cabal was phoned by Espinosa who asked him to make the $US5 million previously offered available, as money was needed to meet Zedillo’s campaign costs.  He asked that the contribution be in cash or by way of small deposits made into the trust because of electoral laws regulating campaign contributions. (T4400)  Cabal replied that the group of businessmen with whom he was associated had difficulty in providing further funds for the campaign and that he was somewhat disappointed with the state of affairs in Mexico.  In the event Cabal said he would get Alfredo Castaneda, an officer of Banco Union, to get in touch with Espinosa to see if something could be arranged.  His own attitude was that he was not keen to provide cash or to organise his associates to promote Zedillo’s campaign.  Nevertheless he spoke to Castaneda and told him to work out a solution in response to the pressure that was being applied by Espinosa for contributions.  He didn’t personally want to support Zedillo, he just wanted to find a way of avoiding problems.  He told Castaneda to meet with Espinosa or Espinosa’s people to work something out.

10. On 12 May Cabal met with Espinosa and, faced with his insistence that Cabal contribute cash, he offered a personal contribution to the extent of the limit permitted by  recently introduced campaign contribution laws.  The maximum amount permitted was one million pesos which, at that time, was the equivalent of about $US300,000.  Cabal deposited the amount by way of a cheque into a trust account in Banca Cremi. (T4409)  The deposit was made on 26 May 1994.  A receipt for that deposit was issued and was received in evidence before the magistrate. (C44)  In the same month, Cabal received calls from one Mariano Palacios, a former State Governor, requesting further support for Zedillo’s campaign.  Cabal told him the Bank was already contributing to the campaign and was unable to give any more support. 

11. At this time, June 1994, the merger of Banco Union and Banca Cremi had still not proceeded as necessary approvals had not been received.  Cabal blamed the delay on Ortiz and another official, Thomas Ruiz.  They constantly imposed requirements.  He said that when specified requirements were fulfilled, further requirements would be raised. 

12. Cabal’s involvement with the Zedillo campaign was heightened when he was asked to accompany Zedillo on his tour to Tabasco on 12 June.  He travelled with Zedillo in a private plane together with some other people.  His relationship with Zedillo however was not close.

13. On 21 July 1994, Cabal met with Espinosa and went through with him the file relating to the trust account in Banca Cremi.  Espinosa had asked for the documentation relating to the operations of the Bank with regard to the PRI trust so Cabal took along to the meeting the trust information together with some information on expenses.  The expenses related to promotional material in support of the Zedillo campaign, including the publication of a booklet and the production of key rings.

14. A few days after his meeting with Espinosa, Cabal and the General Manager, Joaquin Acala, were asked to attend upon Ortiz.  The meeting took place on 26 July at the Finance Ministry.  The purpose of the meeting was to discuss the irregularities said to have been  discovered by the audit which had been carried out by the National Banking Commission.  At the meeting, according to Cabal, he and Acala were told that they should make all efforts to clear up where the irregularities had occurred but that they should maintain absolute secrecy about the administrative intervention by the Commission as the elections were very close and it was not desirable that it should be known in that environment that a bank was subject to intervention.  Mr Bailey was not to be made aware of the intervention.  Ortiz asked Cabal and Acala to sign a document of formal notification of the intervention.  Cabal raised the question of authorisation to have the Bank’s shares listed on the Stock Exchange but was told that while the irregularities were under investigation, the Bank shares would not be able to be listed.  On his account of it, he signed the notification of intervention as it was the only way that ultimately the float would be able to proceed.  Ortiz told them that they would have every opportunity to clear up any alleged irregularities.  He said he had no difficulty with that as the Ministry was aware of all the Bank’s operations in any event.

15. The document signed by Cabal and Acala was in the following terms, as translated orally to Her Worship by Rudolfo Dela Guardia Garcia, a legal attache to the Mexican Embassy in Australia:

    “1.In meetings held in on the 8^th and 17^th of June 1994 the National Banking Commission made known to the officials of the aforementioned credit institutions various irregular operations which were detected in the process of supervision which is being undertaken by such organisation.  Likewise the observation was reiterated on loans granted for the purchase of shares of Banco Union SA and Grupo Financiero Cremi SA de CV without the fact that to that date such irregularities may have been sufficiently made clear or clarified nor resourced.

    2.Dated 21^st of July 1994 Messrs Lic Carlos Cabal-Peniche and public accountant Hoakim El Kala Heros verbally accepted before the Chairman or President of the National Banking Commission the existence of irregular operations at Banco Union SA which implied the financing, the excessive financing to various people in relation to the acquisition of companies. (T1162)

    3.In view of the above at an extraordinary meeting of the Board of Management of the National Banking Commission dated 24 July 1994 the aforementioned Board agreed on the administrative intervention of Banco Union and Banca Cremi, appointing for this purpose as intervenor Mr Public Accountant Jose Camargo Ascencio under the terms as provided for in Article 137 of the Credit Institutions Law as well as in Articles 40 to 42 of the Regulation of said Commission in matters to do with inspection, vigilance and accountability. (T1181)

    4.In these very same act delivery is made to Messrs LIC Carlos Cabal and public accountant Hoakim El Kala of the intervention audit files, file numbers 601-1-vJ-32777-94 and 60-1-vi-32778 dated 26 July 1994 to which Article 41 makes reference of the aforementioned regulation. (T1163)

    5.Mr LIC Carlos Cabal-Peniche and public accountant Hoakim El Kala Heros shall supply the National Banking Commission and the administration auditor with all such information regarding the irregular operations which may be of their knowledge with the purpose of evaluating the impact on the financial situation of Banco Union SA and Banca Cremi SA. (T1162-63)

    6.Likewise the aforementioned banking officials shall submit presently to the consideration of the National Banking Commission the form and terms in which any irregular operation is sought to be normalised. (T1163)

    7.The officials of the aforementioned Credit Institution shall at all times collaborate with the appointed auditor, appointed by the National Banking Commission without prejudice to other sanctions that may result applicable, the failure to co-operate or the lack of accuracy in the information supplied to the auditor or to the Commission shall result in the intervention with the status of management of the very same institutions on the terms of Article 138 of the Credit Institutions Law.”

16. It is submitted for the applicants that Cabal, by being told to sign this document, was being directed to sign a document falsely acknowledging the occurrence of irregularities.  If it were, from his point of view, a false acknowledgment that was his own doing.  It does not import any want of bona fides on the part of the National Banking Commission.  I find it unlikely that Cabal did not appreciate the potential seriousness of the allegations to which he was, in broad terms, assenting.  He was, by virtue of paragraph 2 of the document accepting “…the existence of irregular operations at Banco Union SA which implied the financing, the excessive financing to various people in relation to the acquisition of companies”.

17. The day after he signed the irregularities document presented to him by the National Banking Commission, Cabal obtained a visa from the French Consul General. (T1162)  On 30 July his father died.  Subsequently he and his family left Mexico and travelled to the United States where they spent a few days.  From there they went on to Europe. Cabal’s stated purpose for going to Europe was to negotiate a personal line of credit in Switzerland.  The line of credit he negotiated was about $110 million.  Its objective was to enable him to acquire Del Monte Foods, a canning operation, and merge it with Del Monte Fresh.  He regarded the acquisition of Del Monte Foods as a matter of considerable significance.  The overall price of the acquisition was about $US1 billion.  The acquisition brought with it an important distribution network in the United States.  The company had a very high consumption of tomatoes and Mexico is a very important producer of tomatoes.

18. While Cabal was in Europe the Mexican presidential elections took place on 21 August 1994.  Zedillo was elected as President. (T1367)  On or about 24 August 1994 Aspe’s secretary, Jorge Trrasso, telephoned Cabal from Mexico saying that he should come back to Mexico to have a conversation with Aspe.  As a result of this Cabal made an appointment to see Aspe on 31 August in Mexico City.

19. Immediately after the election of the President, on 29 August 1994, Banco Union and Banca Cremi published newspaper advertisements congratulating President Zedillo upon his election.  Although Mexico’s chronology suggested that Cabal had ordered the publication of these congratulations, neither the notices of congratulations nor the evidence about them from Zinser bore out that he was personally responsible.

20. Under the Criminal Law of Mexico there are two classes of offences: those which may be investigated by the Attorney-General by virtue of his or her office; and offences which are de querella, which can only be the subject of criminal investigation upon the filing of a complaint by a person legally entitled to make the complaint.  In respect of tax offences or tax-related offences, the Ministry of Finance may file a querella.  For banking offences, either the bank itself or the Ministry can formulate the complaint but the complaint must be made on the basis of a confirming technical opinion from the National Banking Commission. (T 2253-2256) It is contended for the applicants that what constituted a formal complaint from the Ministry of Finance was issued on 29 August and delivered to the Federal Public Prosecutor at the Attorney-General’s office on 30 August.  The prosecutor applied on 31 August to a judge, the Seventh District Judge for the Federal District in Criminal Matters, Ricardo Ojeda Bohorquez, who issued a warrant or order of apprehension on the same day.  The order so issued related to Cabal and nine other persons.  The alleged offences were against articles 112, 113 and 114 of the Law of Credit Institutions.  The factual recital grounding the issue of the warrant comprised about 142 pages.

21. On the same day, 31 August, Cabal who had returned to Mexico, met with Doctor Aspe.  Also present was Ortiz, Fernandez and Mr Thomas Ruiz.  Dr Aspe told Cabal he was very annoyed about the irregularities which had been found in connection with the Bank and that Cabal should follow instructions from Fernandez in order to clear them up.  Cabal replied that he was unaware of the irregularities and so far as he was concerned the Bank was operating normally.  Aspe said if he wanted to demonstrate that, he should follow Fernandez’ instructions.  There was some discussion about the float, Cabal making the point that he still hadn’t received authorisation to float the shares on the Stock Exchange.  Aspe said he should not proceed at that time.   The irregularities should be cleared up and Fernandez’ instructions followed.  Cabal referred to his negotiations in Europe in order to obtain finance and the line of credit which he had arranged.  However Aspe was not interested in talking about that. 

22. On the following day Cabal met with Fernandez.  He asked why the Bank was being singled out with respect to the alleged irregularities.  He told Fernandez that it was operating the same way as all other banks in Mexico and that so far as he was aware the Commission was fully informed of all the operations that were being undertaken in the Bank and that those operations were not irregular. Fernandez said he was not the person to decide on Cabal’s case.  Decisions would be taken at a presidential level.  It was an extremely big case for Mexico because of all the companies that Cabal was managing and that were involved.  He had nothing personal against Cabal and was only following instructions.  He had set out a list of questions which needed answering and had given them to Lel Kala.  He told Cabal he should be ready to be called to a further appointment.  Cabal said he would have to return to Europe to be with his family and that Fernandez should give him adequate notice. He said that he would place fully at Fernandez’ disposal any information he wanted about the Bank.   On the same day that he met with Fernandez, Cabal also consulted a lawyer, Juan Velazquez, whom he described as “…an important criminal lawyer”. (T4537)

1. While Cabal was meeting with Fernandez and his lawyer, officers of the National Banking Commission were appearing before the Federal Public Prosecutor. An application for a second order of apprehension or warrant was made to the Seventh District Judge on 2 September and issued on the same day.  It was not communicated to the Federal Prosecutor until 5 September at 3.15pm.  The recital of facts backing the warrant runs to 46 pages.  The order required the apprehension of Cabal, Gabriele Roblesy Gonzalez Del Cossio, Francisco Macias Zamora and Alejandro Garza Vasconcelos  “as subjects with probable responsibility for committing the felonies foreseen and sanctioned by articles 112, fraction V, clause d), and 114 fraction 1, of the Law of Credit Institutions”.

2. Cabal departed from Mexico on 1 or 2 September 1994.  He travelled first to the offices of Del Monte in Miami where he spent a few hours and then travelled to Europe to join his family.  He has not been back to Mexico since that time. 

3. On 31 August Pasini had also departed Mexico for Europe, specifically Monaco where he joined his sister, Teresa Cabal.  The reason he gave in his evidence was that he had been invited to see his sister on holidays and also because he had been offered, some time previously, a job with Del Monte.  No particular time had been mentioned, just a period of training and the offer of a position if he turned out to be suitable.  In the event he did not take up any such position.  In context, the account given of his reasons for leaving Mexico at the time seem inherently improbable.

4. A letter dated 1 September 1994 from the National Banking Commission to Banco Union, signed by Fernandez, announced the Commission’s intervention in the affairs of the Bank.  It appears from the concluding paragraphs of the letter, which is in Spanish, that this intervention was made pursuant to a resolution of the Commission on 28 August.  The second last paragraph appears to identify the object of the intervention as normalisation of irregular operations and the establishment of an administration which would observe sound financial practices.  Cabal did not become aware of this intervention until 5 September when he saw it on CNN television news in Europe.  The substance of the report as Cabal described it in his evidence to Her Worship was that the Bank had been the subject of intervention through the agency of Aspe and Ortiz, that approximately forty officers of the Bank had been detained and that he, Cabal, was an absconder from justice.  He immediately rang his lawyers in Mexico so that they could analyse the situation and take charge of the case.  On the same day, Mr Zinser was given Mr Cabal’s power of attorney by two of his legal representatives in Mexico, a process which, according to Zinser, is available under Mexican civil law. (T2509)  The document was not actually delivered to Zinser until the following day, 6 September. (T2523 X190)

5. Not surprisingly there was wide spread publicity in Mexico surrounding these events and Cabal’s departure from the jurisdiction.  There was an attempt before Her Worship to cross-examine Zinser on newspaper reports of statements said to have been made on Cabal’s behalf by the lawyer, Velazquez, to the effect that Cabal would respond to each of the charges against him.  Counsel for Mexico sought to rely upon this evidence to establish that it was widely believed in Mexico that Cabal was out of the country.  Evidently this would either explain or rebut arguments that might be made about the exhaustiveness of the police inquiries about the whereabouts of Cabal in Mexico. (T2687)  Her Worship quite properly in my opinion, refused to allow cross-examination along these lines to continue.  The newspaper reports were simply marked for identification. (T2684-2688)  In the meantime, acting on his lawyers’ advice,  Cabal made no statements and stayed out of the jurisdiction.  His lawyers were in contact with Aspe and treasurer officials.  Cabal himself did not have continued communication with bank officers.  Everything, he said, “… was in a very confused state”. (T4443)

6. While in Monaco, Pasini also heard the news that “the government had taken [Cabal’s] banks”.  He decided to stay there because as he put it:

   “…my sister needed support at that time and I made the decision that the right thing was for me to stay with her at that time.” (T4650)

   Towards the end of September or early in October 1994, Pasini went to France with his sister and stayed with her and her family in a town called Dreux near Paris. 

7. On 14 September a third warrant or order of apprehension was issued by Carlos Arellano Hobelsberger,  Judge for the Eighth District in criminal matters in the Federal District.  The warrant was issued against Cabal, Hector Gomez Lopez and Eduardo Hernandez Torres “…for their probable criminal responsibility in the commission of the crimes contemplated and penalised by article 112, fraction V, 112, fraction V paragraph e), and the same number in its fraction VI of the Law of Credit Institutions”.  In this case it appears a complaint was made to the Federal Prosecutor’s office on 7 September 1994, application for the issue of the warrant made on 8 September and the warrant issued on 14 September 1994.  On 9 October a fourth warrant was issued by the Tenth District Judge.  The initial complaint to the office of the Federal Prosecutor was made on 30 September 1994 and the application for the issue of the warrant on 4 October 1994.  The warrant was for the arrest of Cabal and Alfredo Castaneda Bretton for breaches of article 112, section V, first paragraph and article 112, section V, clauses c), d) and e) of the Credit Institutions Law.  The issuing judge was Olga Estrever Escamilla. 

8. On 5 November 1994, Cabal arranged for the publication of an open letter in the Mexican press.  His objective, according to his evidence before Her Worship, was “… to make known to the public opinion in general and to the Bank shareholders with regard to what my situation was at that time in relation to the government of Mexico.”  He also asserted that the letter referred to his political beliefs.  A translated version was admitted in evidence before Her Worship without objection (C47).  The letter was published in a newspaper called “Financiero”. (T4446-4447)  In the letter Cabal asserted that an attempt had been made to arrest him on 5 September when police entered his offices at Banco Union.  He referred to the appearance on television that night of Ortiz reporting that the Ministry of Finance had carried out “.. a managerial intervention on behalf of the National Banking Commission, of all the intermediaries that make up the financial group Cremi-Union…”.  He referred also to Ortiz’ announcement that “based on the petitions of the financial authority, the Office of the Attorney General of the Republic filed the criminal proceedings, and the legal authority issued the corresponding orders of arrest against Mr Carlos Cabal Peniche…and others”. Ortiz, he said, later gave “an extensive but vague explanation to support his hasty measures, which amounted only to defamatory assumptions and fantasies without any basis whatsoever, with the sole purpose of provoking and fostering scandal”.  He described the procedures set in motion as “…the machinery of injustice”.  He said:

   “Up to now I have been silent while I waited for better circumstances in which to defend myself.  Those who attack me do so without reason, and their actions have nothing to do with compliance with the law and are, instead, arbitrary actions born from resentment.  I am not driven by any negative feelings, but by my wish for the truth to be known, and for lawfulness to prevail over the powerful personal interests that, feeling affronted, have led to my persecution.”

   He said he had fled from injustice.  He claimed that the justice system did not always act with the independence that was essential to “fully trust in it”.  He denied that he had committed any of the “absurd crimes” of which he was accused.  The relevant authorities had always been informed regularly and with full details of his every move and activity in the banking institution.  He went on to say:

   “Clearly identified interests, seeking tax concessions, have fostered the confusion, and have taken advantage of it in order to try to implicate several of my friends, for purposes of party politics.  Others have reached the height of absurdity in trying to link me to drug dealing and money laundering.  Some have discovered the right occasion to become, without any real grounds, severe critics.”

   He referred to his family background, his love of his country and of his region.  He had always been a firm believer in the greatness of Mexico, had constantly wanted to do something important for the country and had been willing to take risks.  Speaking of his banking group he said:

   “In the struggle to consolidate and expand that institution, I thought that it was my duty that small and medium-size entrepreneurs of the South Eastern Region should have the chance to take part in the intensive development of that region, so that it could attain progress comparable to that of other regions in the country.”

   He said it was in the Maya States that unemployment had reached “unimaginable levels”.  He did not want them to be left behind in Mexico’s progress.  It was the same desire which led him to purchase Del Monte Fresh.  He asserted that his competitors were the main beneficiaries of the injustice caused against him.  He said:

   “I have also been informed that the same powerful interests, with specious arguments and unlawful measures, intend to take this company away from me.  I shall do, backed by the law, all that is necessary to prevent this from happening without retribution.

   By acting independently I have earned the enmity and rancour of the representatives of the most exclusive and conservative sectors of the country, who arrogantly watched us and considered our South Eastern Region Group as a collection of incompetent, uneducated provincial men.

   Therefore, it is understandable that we, the newcomers, have been the ones chosen to give a show of pretended legal and moral exemplariness.  This is essentially unfair, because it is evident that there are many loopholes in the legislation regulating the matter, there is an abundance of vacuums, anachronisms and ambiguous interpretations, which permits and even fosters their arbitrary enforcement.  This is an area that deserves an in-depth analysis.”

   He said that he did not intend to surrender control of either Grupo Financiero Union or Del Monte Fresh.  He knew there was a path full of obstacles in front of him.  He said he would act with determination for so long as it was necessary.  By way of addendum to the translation of the letter Cabal indicated that the reference to “interests, seeking tax concessions” is a familiar Mexican expression meaning “people who have sold themselves to the government”. 

9. On 1 December 1994 Zedillo assumed office as President of Mexico.  He appointed as Attorney General, Antonio Lozano Gracia, a member of the opposition National Action Party (PAN).  Lozano in turn appointed officials who were not members of the PRI.  Professor Roett, to whom this was put in cross-examination, was dismissive of it saying:

   “It has now become symbolic to appoint a non-PRI person to the position of Attorney General, to convince us that the rule of law exists in Mexico when it does not.” (T2060)

   In December 1994 the Mexican economy experienced difficulty evidently known as “the December mistake”. On 20 December the Finance Minister, Jaime Serra Puehe, announced a sudden devaluation of the peso.  The impact of that decision led to his resignation and replacement by Ortiz who had initially been appointed as the Secretary of Communications and Transport by Zedillo. (X 187). A number of banks which had been privatised under President Salinas had problems and were the subject of interventions. (T4448)

10. On 31 December 1994 regulations were promulgated in the Official Gazette by the President at the request of Congress which apparently contained transitional provisions to ensure continuity of the institutions of government, including the administration of the Supreme Court and the Council of the Federal Judiciary. (T3636 X-246)

11. In January 1995 the Chase Manhattan Bank published a newsletter on the financial crisis in Mexico, the author of which was Professor Roett.  In that newsletter Roett referred to three areas in which the monetary crisis could undermine political stability in Mexico:

    1.The year old Zapatista insurgency in the State of Chiapas associated with demands for the resignation of the incumbent PRI governor on the grounds that his election was procured by electoral fraud. 

    2.Imminent state elections.

    3.The role of labour unions, their relationship to government and the PRI.

    The newsletter concluded that the Mexican monetary crisis had overshadowed the commitment of the Zedillo administration to political reforms including negotiations to resolve the Chiapas crisis and the guarantee of fair elections at State and municipal levels.  It also raised the question whether or not Mexican workers would accept a prolonged period of wages losses and diminished high standards.  It observed that to the degree the Zedillo government was unable to stabilise the peso and avoid inflation it ran the risk of social and political uncertainty.  Chase Manhattan Bank however subsequently published a memorandum stating that the newsletter did not reflect its views.

12. On 31 January 1995, a fifth warrant issued by the Eighth District Judge.  It was directed against Cabal and Castaneda and asserted contraventions of article 112, fraction V, first paragraph and 112, fraction V clause c), d), and e) of the Law of Credit Institutions. The warrant and backing facts occupy some seventeen pages.  It does not appear from the recital when the complaint was first made to the Federal Public Prosecutor’s office or when the application for the issue of the warrant was made to the judge. A sixth warrant was issued on 7 September 1995 by the Seventh District Judge against Cabal, Castaneda, Ernesto Malda Maza, Ricardo Armas Arroyo and Rafael Antonio Ramirez Galn alleging contraventions of article 112, section V, first and second paragraphs, clauses c) and e), of the Credit Institutions Law.  In this case it appears that there was a complaint on 22 May 1995 and that the request for the issue of the warrant was dated 31 July 1995, received by the Court on 2 August 1995.  A seventh warrant issued on 24 October 1995, again by the Seventh District Judge.  It appears that the initial presentation of a complaint to the Federal Public Prosecutor was on 3 October 1995 and the application for the warrant on 24 October 1995.  The warrant was directed against Cabal, Castaneda, Malda and Armas and again asserted contraventions of article 112, section V, paragraphs c) and e), of the Credit Institutions Law.

13. In January or February 1995 Pasini learned that one of his businesses which he owned in partnership with Manuel Hurtato had been closed without any prior warning to him.  About six months later, another of his businesses closed.  Also at about that time he had to renew his visa to remain in France.  He did that and in July 1995 moved with his sister to Spain.  From time to time he travelled back from Spain to France.  He claimed that while in Spain he and his sister and her family were consistently followed. (T4652)

14. In September 1995, Pasini was introduced, in Madrid, to a person calling himself Domingo Murguia, whom he later discovered in fact to be Juan Miguel Ponce Edmondson, an officer of Mexican Interpol. (T4653)  Pasini met Ponce at a hotel in Madrid in company with his sister, Teresa Cabal, and a Spanish lawyer Pedro Gonzales Trevijano.  Ponce told Pasini and his sister that they had no chance of fighting the government.  It was like David and Goliath.  The only way forward was to negotiate with him.  They could not trust their Mexican lawyers who were only interested in making money.  He told them that they had to understand “…that the problem Carlos [Cabal] had at that stage was only a political problem and could only be resolved in a political way”.  The people who were after Cabal wanted “to present him to the public in a photo behind bars and with the striped prison suit on”.  Cabal should give himself up on 15 September.  If he did not, there would be serious consequences for the people who were close to him and who were helping him.  Ponce said that the people following Cabal already had the striped jacket measured up for him and that it was up to the Pasinis whether it was to be luxury model or just a standard model.  Ponce said warrants could be issued for the arrest of Pasini, his sister Teresa, and his brother Pedro.  He told Pasini he was in a very delicate situation for sticking his bib in where it wasn’t his business.  He ended by saying to Pasini:

    “I hope your faith can save you because that’s the only thing that will be capable of saving you.” (T4656)

15. A further meeting was arranged with Ponce at the same hotel.  In the course of that further meeting he asked which politician Cabal had offended and what he had done to receive such a punishment.  Pasini put it to Ponce that if he had important contacts he should know which politician it was.  Ponce didn’t want to say who, he didn’t want to reply, he kept saying that the Pasinis should state their theory as to who the offended politician was.  The meeting concluded with Ponce warning the Pasinis that their time had started to tick over and that they should make a quick decision because time was hanging over them.

16. In October 1995, when Pasini was at his apartment in Druex in France, two French policemen and a Mexican police officer, Juan Carlos Lopez, entered and demanded to search his apartment and his car.  Lopez told Pasini the reason for the search was that he was a member of Cabal’s family and was helping Cabal.  The police carried out the searches then took him to a police station in Versi where they kept him for two and a half days.  He claimed that Lopez threatened him, saying that he was  going to make sure that Pasini would go to jail in Mexico and he wouldn’t survive more than two days as he, Lopez, would place Pasini with his friends in the prison.  On 24 October 1995, Pasini was interviewed by French authorities and made a statement to them in Spanish which was tendered untranslated (X171).  He told French authorities he was President and General Director of a company called Xurtu.  The purpose of the company was the sale and lease of property.  The lawyer Pedro Gonzales had asked him to occupy the position of President and General Director.  He had accepted that appointment because the lawyer told him that role would not cause him any problems.  An office was leased in Madrid for carrying out the various operations of the company.   After his release by the French police, Pasini went to Madrid.  While there he was telephoned at a hotel by the same Mexican officer who asked where Cabal was.  Pasini said he did not know.  The officer told him that he was in serious trouble for saying that and for not co-operating and that the officer was going to be very happy to do damage to him personally. (T4660)  A short time later he was joined by his girlfriend, who is now his wife.  In view of the risks of remaining where he was he decided it would be best for Mrs Cabal and himself if they separated.  Pasini then travelled to Argentina where his girlfriend joined him in November 1995.  They were married there in December 1995.

17. The evidence of a Federal Agent, Robert Grant, of documents obtained from Pasini in Melbourne in November 1998 (T4775-4777) and the documents themselves, having regard to Pasini’s refusal to answer questions about them in cross-examination (T4684-4685) establish that in 1996 he obtained a false passport from the Dominican Republic in the name of Gregorio Montero (X-271).  He also obtained an extract of a birth certificate from the Dominican Republic in 1997 (X-272) under the name Montero and an identity card in the same name from the Republic of Uruguay (X-273).  In addition, he was in possession of an identity card from that country in the name of Aracelis Del Carmen Pichardo Diaz (X-273). 

1. I do not think that the concept of a political opinion for the purposes of s 7(b) and (c) should be narrowed as a matter of construction.  The necessity to link the opinion held or expressed to a prosecutorial or punitive response by the requesting government will in many, if not all cases, require a demonstration of its practical significance for that government. That may in fact narrow the effective range of opinions capable of supporting an extradition objection.  But the circumstances in which such opinions may give rise to adverse governmental responses of the kind contemplated by the Act, are potentially so diverse that it would be unwise to impose some limiting construction upon the ordinary meaning of the words.

2. Whether or not it is necessary that the relevant political opinion, for the purpose of an extradition objection, be actually held by the requested person, or whether it is sufficient that the political opinion is imputed to the requested person by the requesting country, need not be explored here.  Spender J has observed in Stanton v Republic of the Philippines (unrep Fed Court 12/1/93):

   “It is not an extradition objection that a person might suffer prejudice because that person has a connexion with another person who holds certain political opinions…”

   For present purposes however, I do not exclude the possibility that an imputed political opinion may form a basis for an extradition objection.  In the event and having regard to the conclusions which I have reached in relation to the extradition objections in this case, it is unnecessary finally to determine that question.

3. How then do the applicants put their case of prosecution on account of their political opinions?

4. The amended application in par 42 sets out some sixty one paragraphs of particulars to support the extradition objections under s 7(b) and s 7(c) of the Act. These were supported by reference to oral testimony and large quantities of written material to which the magistrate was asked to have regard. My overwhelming impression, after having read the relevant submissions and listened to Mr Burnside’s careful and comprehensive argument, was that there was an air of unreality about the substance of these objections and their scope. Based in part on sweeping assertions and broad generalisations about the political and judicial systems of the United States of Mexico, they require consideration of material and invite conclusions of a kind which are, in my opinion, inappropriate for the process which a magistrate must undertake in determining eligibility for surrender under s 19, or this Court on review under s 21. These general matters are of the kind that require the much broader processes of governmental judgment, backed by expert advice, which inform decisions such as whether a treaty is to be entered into or continued, whether a s 16 notice is to be issued and whether ultimate surrender is to be effected. The approach to be taken must have regard to the nature of the process which the Act has provided in relation to the determination of eligibility for surrender.

5. In my opinion, which is not advanced as an exhaustive proposition, an extradition objection under s 7(b), in proceedings before the magistrate, will not usually be made out unless :

   1.A well-defined political opinion, at the time of the request for surrender, is or has been held by the applicant.

   2.The content and the history of expression of, or action upon the asserted political opinion by the applicant is such as to be of demonstrable concern to the requesting government and to form a credible basis of that government’s desire to prosecute or punish the applicant.

   3.There is material of probative value on which the inference is open that the crucial decisions underlying the request for extradition by the requesting government have been taken because of the applicant’s political opinions.

6. The outline of the facts upon which the political opinion objection is based is set out in the applicants’ outline of submissions and conveniently summarises their contentions as follows:

   1.For over seventy years Mexico has been and is today a country governed by a single party, the PRI.

   2.Mexico is not a democracy, but a sophisticated dictatorship, in which the President of Mexico is all powerful and there is little or no rule of law.

   3.Under the President there is a small political and economic elite which runs Mexico.

   4.The Mexican Government has traditionally and notoriously used the legal system as an instrument to enforce its political will.

   5.Since before 1994 Cabal has had political opinions.

   6.By 1994 Cabal’s political opinions had brought him into conflict with the Mexican Government.

   7.In the first half of 1994 Cabal’s political opinions caused him to defy the authority of the Mexican President and the ruling party.

   8.Cabal’s defiance was of a kind liable to provoke a punitive or disciplinary prosecution against him.

   9.A senior Mexican government official told Cabal in August 1994 that the processes in train against him were being directed by the President.

   10.The criminal complaint and application for the first warrant against Cabal were processed with extraordinary speed, contrary to what they told Cabal, the authorities were not interested in hearing him address their purported concerns.

   11.The Ministry of Finance which initiated the charges, showed no interest in recovering the loans the subject of the charges, but only in writing the loans off, which would enable charges to be brought under Mexican law.

   12.Before any charges were laid against him, Pasini engaged in conduct that was liable to be perceived by the Mexican government as evincing political opinions parallel to Cabal and a political stance based on those opinions.

   13.A senior Mexican government official told Cabal in November 1998 and Mrs Cabal, Pasini and their lawyer in September 1995, that Cabal’s was a politically motivated prosecution.  He also told Pasini that Pasini in particular among those helping Cabal was at risk of being prosecuted for getting involved. – This refers to Cabal and Pasini’s discussions with Ponce.

   14.In May 1999, Cabal formed the opinion that he should disclose to the public his involvement and President Zedillo’s involvement in undisclosed contributions to the presidential campaigns of Colosio and Zedillo.  By doing so he triggered a political scandal.

   15. Zedillo responded to Cabal’s disclosures by publicly and falsely denying the fact of the contributions and his knowledge of the contributions.

   16.In addition, in an unprecedented, full-page notice published in the Mexican press, the PRI falsely branded Cabal a liar as a result of his disclosures and declared its determination to see that the full weight of the law is brought to bear against Cabal.

   17.Cabal’s case is one in which Zedillo is now specifically interested.

   18.The Mexican government officials charged with pursuing Cabal and Pasini and progressing their prosecutions or those of their co-accused, have evinced a disregard for due process of law.

   19.The Cabal/Pasini prosecution is high-profile in Mexico; high-profile prosecutions get special treatment from the authorities.

   20.Cabal and Pasini are wanted by Mexico for political reasons.

   21.Cabal and Pasini are unlikely to receive a fair hearing in Mexico. (Document 72)

7. It may be accepted as matter of fact that Mexico has for a long time been governed by a single party, the PRI.  However statements by expert witnesses that it is “not democratic” and is “an authoritarian system” or that the President is “all powerful” and that “there is little or no rule of law” are of little utility.  They are normative statements of historical, social and political issues which a court is ill-equipped to assess.  The range of attitudes in contemporary political and social debate in Australia will surely throw up those who are prepared to argue that the Executive under the Prime Minister is all powerful, the Parliament a mere cypher, and true democracy (however that is understood) not realised.  The point is probably illustrated by Professor Roett’s discussion of the rule of law which, he says, does not exist in Mexico.  Asked what he understood by the rule of law, he said:

   “The rule of law is a system that is transparent in which there is accountability and in which there is trust on the part of the people of the nation.”

   The level of generality and the polemical tone of his testimony on these issues, as well as that of Professor Valdez, Mr Guerra and the lawyer, Zinser, to similar effect, does not provide any secure foundation from which to make judgments about the purposes of the particular prosecutions under consideration in this case. 

8. Focussing more closely on the independence, impartiality and integrity of the Mexican judiciary, whose members issued the warrants, Professor Roett acknowledged that he had not conducted any research into the views he expressed about them.  It was not his area of specialisation.  Attempts to elicit from him evidence about selective prosecutions bore little fruit.  He had no direct knowledge of the phenomenon and had not conducted research into the area, although he had read some articles about it. 

9. Interestingly, he did credit President Zedillo with attempting institutional reforms.  He had moved the PRI to greater openness and had supported free elections at the State level and for Congress.  Professor Roett also seems to have suggested that President Zedillo was concerned about reform of the judiciary but had “not been able to make a great deal of progress in part because of the nature of the Mexican judiciary, the tradition of the Mexican judiciary being amenable to political influence” (T1845).  This he characterised as “one of the most difficult institutional changes across Latin-America” and referred to “many programmes supported by foundations and by governments attempting to work with governments to make the rule of law transparent, to improve the judiciary”.  But this, he said, was “moving very slowly in the case of Mexico”.  Professor Valdez, a Professor of Constitutional Law and Political Science, spoke in broad terms of the intolerance of the political system for dissidence or criticism in key areas.  Its first reaction, he said, was to use the law, one way being by charges of tax fraud based on Mexico’s “incomprehensible tax laws” or some other criminal charge.  The criminal law apparatus he described as “…controlled by the President by means of an employee whose title is Federal Attorney-General to whom the President gives orders and who he dismisses at any moment when he believes it is appropriate” (T2144).  According to Valdez it would be seen as an act of political betrayal for a significant supporter of Colosio, as Cabal had been, to decline then to provide support to the same extent or in the same way to his successor candidate, Zedillo.  Again Valdez evidence, like that of Roett, was evidence of considerable generality and not informed by recent experience in the practice of the law, he having last practiced criminal law in the 1980s (T2179).

10. Zinser who was also called in relation to the extradition objections is the principal lawyer representing Cabal and Pasini in Mexico.  He spoke of the practice of ex parte meetings between lawyers and the judge handling a particular case, although this appears to be a facility available to both prosecution and defence lawyers.  He also spoke of the possibility that a judge could be approached by a Minister or other interested authority, not party to the proceedings.  He said in some cases judges had complained of pressure being put on them (T2229).  In high profile cases, according to Zinser, there was an acceleration of the processes from investigation to application for and issue of warrants (T2276-2277).  In such cases it was not easy for any judge because they were not protected from pressure (T2277).  The way that a judge would react to a high profile case was a matter of luck.  Good judges made it a point to be independent, but it was a difficult struggle. (T2278) 

11. Another witness called by the applicants was Ricardo Guerra, a political science graduate and political consultant who had been employed by the PRI in the General Co-ordinating Office of the 1994 presidential campaign for Colosio and Zedillo.  He gave evidence of a general nature covering the political system, the power of the President, the electoral process and the system by which the President effectively choses his own successor.  He described the Cabal case as “a huge scandal” in Mexico having regard to the significant application of public resources by the government against Cabal. 

12. The preceding accounts of general aspects of the evidence-in-chief of these expert witnesses illustrates the breadth of the opinions offered and what was, at best, their marginal relevance for the kind of determination which the magistrate was called upon to make.  This evidence was extensively criticised in submissions put by Mexico as vague and imprecise, not logically probative and not based upon sufficient relevant expertise.  Nor, it was said, were the witnesses impartial.  I accept, in particular, that this was so of Zinser who was Cabal’s Mexican lawyer.  He could, with all due respect, hardly be regarded as an independent witness particularly when it came to offering opinions about the legal system and its impact upon his client and the way in which the prosecutions were instituted and processed.

13. It is not necessary to canvass the detail of the criticism to say that the evidence of these witnesses in relation to their general propositions about Mexico’s political and legal system does not establish any basis for demonstrating substantial grounds for an extradition objection under s 7.  Those difficulties reflect the more fundamental difficulty about trying to engage the court in making the kind of judgment about Mexico which is proffered in this case.  I should add that in this respect I also regard the magistrate’s decision not to accept the large volume of general “country information” from sources such as Amnesty and other organisations as being correct.  It was also correct, in my opinion, as a matter of procedural fairness.   I was referred to a large number of passages upon which the applicants sought to rely.  There was a mix of general propositions about the Mexican political and legal systems and specific incidents of human rights abuses and the like, the factual aspects of which could not be determined by the Court.  And for the reasons I have already indicated, the kind of judgment they invite is not, in my opinion, the kind of judgment which the magistrate should be asked to make in s 19 proceedings or this Court upon review.

14. Moving from the general to the particular, it is necessary to consider the applicant’s asserted political opinions which are said to occasion the requests for extradition.  The factual history and asserted expression of these opinions has been canvassed earlier in these reasons.  The genuineness of the asserted opinions is in issue.  There was an attempt to encapsulate them in a document put before the magistrate and marked for identification.  As expressed in that document they were:

    “DESCRIPTION OF CABAL’S POLITICAL OPINION

    1.Cabal has held the view that the Mexican Federal Government has not given enough attention to the under-developed Mexican southeast region from which he originates: and has always given preference to other regions of the country such as northern and central regions.  Cabal vigorously promoted the interests and development of the south east of Mexico.  He decided to participate in the changing of the historical position of the region as an underdeveloped and relatively powerless part of Mexico.

    2.Cabal has held the view that the only way for Mexico to prosper and to be able to compete in the international economic arena in light of globalisation and NAFTA is for it to grow and acquire multinational companies, taking advantage of their infrastructure and rapidly training Mexican workers for new job posts.  At the same time, to put an end to the shameful social differences and poverty existing in Mexico, changes have to occur in the political system.

    3.Cabal has held the view that Mexico’s authoritarian presidential system, supported by the Elite will never allow a true democracy to develop.

    4.Cabal believed that Colosio as presidential candidate would have reversed the attitude of the Federal Government to the south east and set the grounds for long term development programs for the extended south eastern region. As well as address the shameful social differences and poverty existing in Mexico through many other actions. the promotion of business operations conducted by Mexicans.  He therefore strongly supported him as an aspiring candidate and eventually as a formal candidate for the Presidency of Mexico.

    5.Cabal believed that the President should, and believed that Colosio would:

    5.1observe the separation of powers doctrine expressed in the Mexican Constitution and not exercise power disproportionate to the role given to him by the Constitution.

    5.2Play an active role in the consolidation of democracy in Mexico.

    6.Cabal has held the view that a person is entitled

    6.1to have his own views on the role of government in the development of the Country.

    6.2to support those politicians who share his views.

    6.3To challenge acts of government where they may involve excess or abuse of power.

    7.Cabal believes that the only way to achieve his views is to be able to maintain his independence and autonomy, whilst at the same time developing his business interests without being controlled by the Elite, and therefore is entitled:

    7.1not to accept unofficial directions from government, where those directions contradict his views.

    7.2conduct his business activities independently from traditional political power groups.

    CONDUCT CONSTITUTING THE EXPRESSION OF HIS POLITICAL OPINION.

    1.Development of businesses in the south east designed to encourage self sufficiency, productivity and wealth generation – shrimps, bananas, parquetry etc.

    2.Acquisition of Banco BCH (renamed Banco Union), and eventually of Grupo Financiero Cremi, including Banca Cremi, to strengthen the Banking project.

    3.Purchase of Del Monte as the multinational entity designed to increase Mexican economic competitiveness and the creation of work posts.

    4.Resistance to unofficial directions from government, (tender of Banco Union political contributions).

    5.Having maintained independence and autonomy from traditional political power groups.

    6.Political contributions to Colosio.

    7.Having resisted, to a certain extent, pressure by the ruling party to support Zedillo as a candidate with cash donations, and only having done so in a different fashion.

    8.The public rejection of the Mexican government’s attempt to blame him for the 1994 banking and economic crisis.

    9.The refusal to surrender to the pressure and serious threats put on him and his family in Spain.

    10.The conduct in Mexico of a vigorous defence to the criminal charges.

    11.The filing of charges by Cabal (since early 1995) regarding abuse of power conduct attributed to high government officers.

    12.The conduct of his defence to the request for his extradition.

    13.The open statements made with reference to political contributions, in a defiance attitude towards the system.”

15. Judgments about the credibility of the asserted opinions must be based upon documentary exhibits and the written record of testimony in the s 19 proceedings. It is sufficient to say for present purposes that I am not satisfied, on the evidence presented, that there are substantial grounds for concluding that Cabal held any political opinion which he expressed or acted upon in any way that was of great significance to the Mexican government.  Certainly there was nothing in my opinion, which would provide such grounds for concluding that the investigations, complaints and warrants issued were procured or pursued by reason of any expression or action upon political opinion held by him at that time and which played a part in the decision of the relevant Mexican authorities to institute the prosecutions now in question and request the extradition of the applicant.

1. Such grounds are not made out by the fact that the President may have taken a personal interest in the case.  His interest would not be surprising given the magnitude of the alleged offences which must be accepted for present purposes.  Nor would it be surprising given the fact that subsequent to the initiation of the prosecutions Cabal has made public statements about his involvement in the financing of the presidential campaigns.  That does not convert the prosecution of him and Pasini into a prosecution on account of his alleged political opinions.

2. Much was made by the applicants of the speed with which certain of the warrants were issued.  Even if that be accepted, it does not point to a political motive for the prosecutions.  Had Mexico been determined to bring prosecutions for political motives, they might have been expected to select a narrow range of issuing judges thought to be compliant.  The warrants however, were issued by some fourteen different judges and one magistrate.  As Mexico pointed out in its submissions, the evidence establishes that the legal process in respect of each arrest warrant involved a number of steps and that each step concerned or involved different people.  These included:

   1.An investigation by the National Banking Commission which included in respect of the banking offences, the provision of a technical opinion as to whether the offence had been committed.

   2.A preliminary investigation by the Public Ministry, the investigative prosecutor needing to be satisfied that the alleged perpetrator was “probably responsible” for the commission of the relevant offence.

   3.An application to a judge resulting in the issue of an arrest warrant.  Here it is necessary for the Public Ministry to satisfy a judge that the alleged perpetrator is “probably responsible” for the commission of the offence identified in the application for the arrest warrant.

   4.A request for extradition.

   As to the latter, the request was made by the Foreign Minister of Mexico, Rosario Green.  Roett says he has known her for twenty five years.  While he asserted that she would act in response to the directions of the PRI, because she is Foreign Minister, he denied any suggestion that she was corrupt.  I accept the submission for Mexico that there is no feasible basis upon which the inference could be drawn that the purpose of prosecuting or punishing Cabal and Pasini for their asserted political opinions could have infected the process leading up to and including the request for extradition to the extent that it could be said to be attributable to the requesting country.  As has been pointed out also, there is evidence that the criminal justice system in Mexico has a review and appeal procedure which has been accessed by Cabal’s co-accused.  The obtaining by them of favourable judgments does not establish any lack of bona fides on behalf of Mexico, but rather gives support to the proposition that the system is capable of yielding results favourable to accused, even those associated with persons pursued for allegedly political reasons.  Moreover, following his arrest on 11 November 1998, Cabal commenced amparo proceedings before a federal judge alleging breach of his rights in respect of the issue of certain warrants.  On 30 June 1999, the submission was upheld by a federal judge that the charges the subject of arrest warrant number three in Cabal Request number 2, had been filed outside the prescribed time period.  That judgment is the subject of review.  It is not a matter which can be canvassed in these proceedings.

3. The applicants also relied upon the statements attributed to Ponce which they say indicate that Cabal’s was a politically motivated prosecution.  Assuming Ponce said what Cabal and Pasini attributed to him, the most likely construction to be placed upon his words is that of an investigator trying to pressure a suspect into cooperation.  I do not accept that his comments can be relied upon to provide substantial grounds for believing that the extradition request was made because of Cabal’s political opinions.  And in one sense of course, it was correct to say that Cabal’s problem was a political one.  That is entirely explicable in terms of the high profile and scale of the offences alleged against him.

4. In relation to the other submissions of the applicants, I do not regard Cabal’s disclosure of contributions to the presidential campaigns of Colosio and Zedillo, the denial of those disclosures by President Zedillo, the public response by the PRI in its advertisement or the statement that Zedillo was specifically interested in Cabal’s case, as providing substantial grounds for believing that the request had to do with his political opinions.  The same conclusion applies to Pasini whose political opinions are at their highest to be imputed only from his association with Cabal. 

5. Having so concluded and having regard to the views I have formed about the “political opinions” of Cabal and Pasini, I am satisfied that there are no substantial grounds upon which it may be said that the request for their extradition is made for the purpose of prosecuting or punishing them for their political opinions.

6. The objection raised under s 7(c) requires the applicants to show substantial grounds for believing that they may be prejudiced at the trial or prejudiced, detained or restricted in their personal liberty by reason of their political opinions.  In this case the dominant feature is the seriousness of the offences which with each is charged.  Given the weight I attach to that and the relative insignificance, to the Mexican government, of the asserted political opinions, actual and imputed, I do not accept that there are substantial grounds for the objection.  It is to be born in mind that the grounds must relate to prejudice inflicted through the judicial process and ancillary processes relating to the custody and security of the applicants.  It might be argued that there is a possibility of some prejudice in relation to one or other of the elements of s 7(c) associated with the high profile nature of the case and the possible embarrassment it has generated to the Mexican government.  But these wider considerations are beyond the scope of the extradition objection which is necessarily linked to political opinions of the applicants.  Those wider considerations are a matter for the Attorney-General.

   Judicial Review

7. In addition to the application for review under s 21, judicial review of the magistrate’s order was sought under s 39B(1A) of the Judiciary Act 1903. The grounds upon which that review is sought are largely subsumed in the grounds for review under s 21. Given the scope of that review as a rehearing de novo, nothing in my opinion is to be gained by entering upon any separate consideration of the grounds raised in support of the judicial review. The various materials said to have been wrongly excluded by the magistrate have been conveniently set out in seven files prepared by the first respondent which also included the applicants' submissions, the first respondent’s submissions and the rulings made by the magistrate at the extradition hearing. The documents excluded were, in my opinion, rightly excluded on grounds of want of probative value and considerations of fairness. A major item which it was sought to introduce into evidence was a report prepared by Michael W Mackey on the Comprehensive Evaluation of the Operations and Functions of the Fund for the Protection of Bank Savings “FOBAPROA” and Quality of Supervision of the FOBAPROA Program 1995-1998. The review of the FOBAPROA program was commissioned by the Congress of Mexico through a hiring committee which engaged Mackey in September 1998. It contained various reflections upon the operation of that process and was adduced to support testimony to be given by Professor William Ford, a Professor of Finance at Middle Tennessee State University. Professor Ford’s opinion was directed to, inter alia, apparent lack of even handedness on the part of regulatory authorities in dealing with Banco Union as against other banks. His evidence would have involved assertions that certain loans, ultimately considered as irregular by the Banking Commission, had in fact been perceived as not irregular. The author of the report not being called, and it apparently having a multiple authorship, no doubt based on inquiries, conversations and examination of documents, there were significant issues of fairness associated with its production and issues of probative value associated with the expression of opinions based on the report. Even allowing for the “substantial grounds” rubric of s 7, I think the report and the evidence based upon it were rightly excluded. In addition it appears that Professor Ford’s evidence may well have entered into the question whether it was likely that some of the offences alleged had in fact been committed.

8. By motion on 10 August 2000 I was invited by counsel for the applicants to consider additional material relating to the entry of the equivalent of a “nolle prosequi” in relation to certain of the offences alleged against Cabal.  I expressed my provisional opinion then that the material proffered would take the Court into an area of inquiry prohibited by s 19(5) and in any event an issue which was not put before the Court in the original extradition hearing before the magistrate.  On that basis, I confirm my provisional view that the material cannot be considered.

   CONCLUSION

9. For the preceding reasons, the decision of the learned magistrate will be confirmed, the application for judicial review dismissed and the applicants required to pay the costs of the first respondent.  There will be liberty to the Commonwealth to apply for an order for costs in respect of its intervention on the constitutional question.  The offences in respect of which eligibility for surrender has been determined are those set out in the annexures to the learned magistrate’s order and they are annexed to the minute of order at the commencement of these reasons.

   I certify that the preceding two hundred
   and forty six (246) numbered paragraphs
   are a true copy of the reasons for

   judgment of his Honour Justice French:

   Associate:
   Dated:

Counsel for the  First and Second Applicants:

Mr JWK Burnside QC with Mr J Manetta and Mr N Aughterson

Solicitor for the First and Second Applicant:

Phillips Fox

Counsel for the First Respondent:

Mr GAA Nettle QC with Mr G Gilbert and Ms MM Gordon

Solicitor for the First Respondent:

Counsel for the Commonwealth Attorney-General  Intervening:

Solicitor for the Commonwealth Attorney-General  Intervening:

Commonwealth Director of Public Prosecutions

Mr D. Bennett QC with Mr M Moshinsky

Australian Government Solicitor

Dates of Hearing:

3-13 April 2000

Date of Judgment:

29 August 2000

INDEX

Introduction   1  -  3

Factual Background   3  - 36
The Offences Alleged   36 - 41
Statutory Framework   41 - 53 
The Treaty of Extradition between Australia and Mexico            53 - 55
Grounds for Review   55 - 58
Constitutional Validity of the Extradition Act   58 - 68

APPROACH TO CONSTRUCTION AND APPLICATION

of the Extradition Act   68 - 73

PRODUCTION OF THE SUPPORTING DOCUMENTS          73 - 75

Nature of the Purported Warrants   75 - 82
Translation – The Requirements of the Act   82 - 87
Authentication – The Requirements of the Act   87 - 92
Want of Authentication   92 - 94
                Want of Authentication – First Cabal Request                 95 - 98
                Want of Authentication – Second Cabal Request             98
                Want of Authentication – Pasini Request   98 - 99
                Want of Authentication – The Statements   
                Of Offence and Penalty and Statements of conduct         99

SUFFICIENCY OF TRANSLATION       99 - 100

Illegibility and Incompleteness  100 - 102
                Illegibility and Incompleteness – First Cabal Request     102 - 103
                Illegibility and Incompleteness – Second Cabal Request 103
                Illegibility and Incompleteness – Pasini Request             103
                Illegibility and Incompleteness – Statements of
                Offence and Penalties  103 - 104

LEGAL INSUFFICIENCY OF STATEMENTS OF CONDUCT         104 - 107

Extradition Objections – Prosecution or Prejudice by Reason
  Of Political Opinion  107 - 123
Judicial Review  123 - 124
Conclusion  124 - 125