Deconstructing Cruz Azul, Part IV: The structural rot is exposed

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.

Part III looked at the emergence of the legal troubles and allegations that ensnared the Cooperativa La Cruz Azul and its soccer team.

Here in Part IV, we continue with the denunciations and accusations that roiled the board room and the locker room throughout the previous decade.

Battle for control of Cruz Azul

At the Co-op, dissident associates eager to put an end to the choke-hold the Álvarez clan had on company operations and corporate funds had briefly ousted Guillermo “Billy” Álvarez in 2018 and again in 2019.

Though their power play failed, the agitators – led by Víctor Velázquez and José Antonio Marín – continued to press their cause, internally and through legal channels.

The problems began leaking into the sports pages, especially after the accusations that player transfers were being used to launder money.

The chaos soon reached the locker room. After two successful seasons, long-suffering Cementeros fans had hopes that the Apertura 2019 could be “the year.”

But the season started slowly and coach Pedro Caixinha was sacked on Sept. 2. A few weeks later, Cruz Azul management floated the idea that contracts would be rewritten with wages linked directly to performance. This caused a mini-riot in the locker room and “La Máquina” slumped to a 12th-place finish.

In November 2019, Velázquez and Co. sought to be recognized as legal representatives of the soccer team, submitting paperwork to Liga MX officials who rejected the request .

By the end of the year, it was apparent that federal authorities were not going to sweep the Cruz Azul fiasco under the rug. But as the drama played out in the papers and in prosecutors’ offices, the Cementeros roared back to life.

Cruz Azul sat atop the standings with a 7-2-1 record when the Covid pandemic forced the cancelation of the Clausura 2020 in mid-March. Coach Roberto Siboldi had the Cementeros playing an exciting brand of fútbol, leaving die-hard fans thinking that a chance to end the interminable title drought had been lost.

A criminal case takes shape

As fútbol operations shut down across the nation, the spotlight on Cruz Azul intensified.

The Álvarez siblings, brother-in-law Víctor Garcés and six other Co-op executives were listed on criminal complaints issued in late May. Mexico’s financial crimes unit (the UIF) alleged that the Cruz Azul executives conspired to launder money, turning over the case file to the Federal Attorney General’s Office.

The UIF had all Cruz Azul-related bank accounts frozen, though they were unfrozen a short time later so that employees – including the soccer players – could be paid. There was conjecture that something “funny” went into the decision with regard to who then had access to the “unfrozen funds” but no further

In June 2020, columnists were writing about dozens of fake invoices totaling 180 million pesos amid reports that at least 192 million pesos had been laundered. There were also allegations that the suspects had moved 1.3 billion pesos abroad to personal accounts and there was speculation that tax evasion charges would be forthcoming.

Two former Cruz Azul employees (a former treasurer and a former director of administration) had turned state’s evidence, providing some certainty to the media dispatches.

A June 3 column by Carlos Loret de Mola detailed some of the questionable cash flow from company accounts, including purchases of lucrative real estate in the United States (10 homes and luxury apartments were found north of the border). One report suggested Billy alone had raked in between 5 and 6 billion pesos from 2011-2018.

Shortly thereafter, media reports indicated Alfredo had turned on his brother, with the younger Álvarez serving as a voluntary witness in hopes of receiving leniency.

In addition to wildly overpaying transfer fees, Cruz Azul had exaggerated rental fees for Estadio Azul, according to Alfredo. The club was paying nearly 600,000 pesos for each home game, more than twice the registered amount, he declared.

At the same time, media speculation suggested Cruz Azul could be disaffiliated from Liga MX. Javier Tejado Dondé cited Article 17-G of the Liga MX bylaws whereby a team could be kicked out of the league “if the owner and or club management were involved in criminal activity or actions of a dubious nature.”

As the bad headlines continued cascading into the public spotlight, Billy released a video in which he declared his innocence, his first public statement on the growing scandal. Three days later, Santiago Nieto – the head of the UIF – revealed that Billy had yet to address the charges of money laundering and fraud.

A month later, an arrest warrant was issued for Billy and the embattled Cruz Azul executive submitted his resignation on Aug. 1 … and disappeared. He remains a fugitive to this day.

Although Billy was relieved of his co-op duties, he was still officially recognized as president of the soccer team by Liga MX officials.

By now, the Cementeros were two days into the Apertura 2020 season, the transfer window was still open, new general manager Jaime Ordiales declined to talk to the media and the co-op associates were still trying to settle on a new company executive, a necessary step before the issues with the soccer team would be addressed. The narrative will continue in Part V.