Mexico: Modern Medici

Most wealthy Latin Americans have so far proved too provincial, too prudent or too suspicious to exploit the new common market trading area set up for them 17 months ago. But there is nothing provincial about Bruno Pagliai, a cosmopolitan tycoon who was reared in Italy, made (and lost) his first million in the U.S. and is now among Mexico’s richest men. This week, in the biggest deal yet made within the nine-nation Latin AmericanFree Trade Area, Pagliai, 60, loaded the first part of a $7,000,000 order of steel pipe for the Argentine PASA petrochemical complex. Next month he will open Latin America’s biggest aluminum plant at Veracruz. A major force in Mexico’s finance, Pagliai is busily negotiating 15 new international ventures.

Pagliai’s personal fortune of at least $50 million is eloquent testimony to the opportunityLatin America offers to those who dare and who know how. “I give away lots of money and I spend lots,” he says with an impish grin. “What the hell.”

From Cage to Vault. A small, enthusiastic and well-read man whose heroes are the Renaissance Medici, Don Bruno has always followed the green flag of money and charmingly ingratiated himself with men of wealth, power and connections. At 19, he followed his merchant father to the U.S., learned the banking business from cage to vault at San Francisco’s Bank of Italy under the immigrant Gianninis, and turned a substantial fortune speculating in stocks. On vacations in Mexico, he struck up a profitable palship with Manuel Avila Camacho, who, on becoming President in 1940, invited Pagliai to settle in Mexico and helped him start Mexico City’s splendid Hipodromo de las Americas race track on an army parade ground. Avila Camacho’s successor, Miguel Aleman, also became friendly with Pagliai, helped him to form his seamless tube company, TAMSA, in 1952, the year Aleman left office.

TAMSA made a profit from the very beginning by selling pipe to Mexico’s Pemex national oil monopoly, last year earned $4,500,000. Most of Pagliai’s deals interlock in some way. Pagliai has helped to finance TAMSA’s export sales through a finance company, Intercontinental S.A., that he created with the capital aid of such cronies as Germany’s Alfried Krupp and big U.S. Investment Banker Charles Allen. Intercontinental S.A. has helped finance foreign investments in Mexico and raise large foreign loans for the Mexican government as well as for Pagliai’s new aluminum plant, which is owned 35% by Pagliai’s interests and 35% by the U.S.’s Alcoa. It is small wonder that he has become the foremost evangelist for U.S. investment in Mexico, and likes to needle gringos who will not take a chance: “Did the people who developed the Wild West cover their covered wagons with insurance?”

Acquisitive Urge. Pagliai lives like the fiscal prince that he is. His showplace home in suburban Mexico City is a white brick Georgian mansion, graced with 14 live-in servants and 50 imported Italian umbrella cypresses planted in holes blasted into lava rock. Besides collecting pesos, he acquires Dresden figurines, Chinese jade, Venetian glass and ancient Spanish books that he often pores over until 2 a.m. His house also shelters Mexico’s most distinguished selection of wines (7,000 bottles) and its finest private art collection—El Greco, Botticelli, Van Dyck, Dali, Diego Rivera—as well as Pagliai’s picturesque third wife, international Screen Star Merle Oberon.* When someone once asked why he does not retire to contemplate his gentle Corots and just clip coupons, Pagliai replied that “clipping coupons gives you calluses on the brain. I work because I still have the ability to create.” While making articulate points about the businessman’s duty to develop a country, he is the first to agree that he has made a good thing out of it, and does not consider the two motives contradictory.

*Who was born in Tasmania of British parents, is a British citizen.