Deconstructing Cruz Azul, Part III: Cracks in the foundation

As the Clausura 2023 gets under way, we’re taking a deep dive into Cruz Azul’s recent history, chronicling how front office turmoil has spilled out of the sports pages and into the financial and political sections.

In Part I of Deconstructing Cruz Azul, we outlined the beginnings of this proud Liga MX franchise, while in Part II we examined its unique organizational structure (it is a subsidiary of a construction company) as well as early indications of internal turbulence.

In Part III here and in Part IV, we’ll explain how chaos at the Cooperativa La Cruz Azul and the resulting legal problems for the Álvarez brothers snowballed and how that impacted the team.

Cementeros players were not directly caught up in the sordid affair, but they had come to love and respect Guillermo Álvarez – the general manager of both the corporation and the team – so they were reluctant to believe the spectacular headlines and astonishing accusations.

The Álvarez empire under attack

The tiff between brothers Guillermo and Alfredo Álvarez did lasting damage. As mentioned in Part II, the siblings patched things up when rivals within the company sought to wrest control of the company from them. But the scars remained. We’ll see that play out in Part IV of this series.

El Universal columnist Salvador García Soto wrote a comprehensive piece in June 2019 that provides considerable detail of the alleged malfeasance, but here’s a summary:

Alfredo had accused Guillermo of corruption and sought to remove him in 2009. A criminal investigation was started though it would mysteriously go away (García Soto suggests the authorities were paid off by “Billy”). When Alfredo made a second power play in 2011, Billy kicked Alfredo as well as their brother-in-law Víctor Garcés out of the company “for making false accusations.”

Two years later, Alfredo and Garcés were reinstated (their expulsion had not adhered to co-op rules) and made nice with Billy primarily because dissident groups within the Cruz Azul Co-op had become emboldened. This infuriated the boss and he and his pals went after their rivals. García Soto writes of fabricated criminal charges and bribes paid out to judges and investigators.

While dissenting co-op associates suffered threats and denunciations – some Cruz Azul Co-op officials were jailed on drummed-up charges, though all were eventually released for lack of evidence – the Álvarez brothers allegedly ratcheted up their financial funny business.

In September 2018, opposition associates held an assembly during which José Antonio Marín Gutiérrez and Víctor Velázquez were put in charge of the Board of Directors and the Auditing Committees, but Billy had the assembly decision annulled via legal action.

In early 2019, Billy threatened and cajoled associates and Cruz Azul employees to stay away from a new assembly meeting. Velázquez was even jailed for six days in April 2019 before the evidence and witness statements were determined to be fraudulent.

Meanwhile, the Cruz Azul soccer team …

In between these two assembly meetings, “La Máquina Azul” qualified for the Liga MX playoffs for just the second time in eight seasons. Not only did they reach they postseason, the Cementeros claimed the No. 1 seed and marched to the Finals … where they lost to América.

Cruz Azul would be eliminated by América again the following season (in the quarterfinals), but it was obvious that the team had become relevant again, despite the murmurings going on at the co-op. But that noise was mostly ignored by the league and the club’s fans.

Ricardo Peláez had taken over as Cementeros GM and the Cruz Azul front office had opened its wallet. Among the splashy acquisitions were playmaking midfielder Orbelín Pineda and forward Jonathan Rodríguez (the latter would go on to claim two Liga MX scoring titles).

Unbeknownst to the league (we hope) and to the general public, the transfers involved wildly inflated prices with the extra money ending up who knows where. Later investigations revealed that Pineda was valued at $6 million dollars at the time of the transfer, but the transaction fee was reported as $13 million dollars.

This, as well as the open case files from the previous investigation, would attract the attention of the new federal financial crimes division that had been operating since crusading President Andrés Manuel López Obrador had taken office in December 2018 with the mantra that he’d put an end to corruption.

With scrutiny now focused on the operations of the co-op and the team, the Álvarez brothers and Garcés might have sought to cover their tracks. But a crisis in the Cruz Azul locker room forced renewed attention on the team.

Coach Pedro Caixinha was axed after Matchday 8 of the Apertura 2019, primarily due to poor results (Cruz Azul was 2-4-2) but also because the Portuguese manager had gone on a sexist and discriminatory rant during a press conference.

While Peláez lined up interviews and compiled a short list of preferred managers, Garcés stepped in and took over the process. Were he and the Álvarez brothers covering up fiscal shenanigans? Were they laundering money through the recruitment process? We might never know. But what we do know is that Robert Siboldi was hired against the wishes of Peláez who resigned in disgust at season’s end.

Siboldi had Cruz Azul back atop the table when the Covid pandemic forced cancelation of the Clausura 2020 season, but the holy mess in the front office prompted his resignation before that year was out.

The managerial situation at both club and co-op in 2020 and 2021 will be the subject of Part IV of Deconstructing Cruz Azul.