Gordillo, 68, is accused of misappropriating funds from the 1.5 million-member National Education Workers Union, or SNTE, which she has led for 23 years.
"We are looking at a case in which the funds of education workers have been illegally misused, for the benefit of several people, among them Elba Esther Gordillo," Attorney General Jesus Murillo Karam said, the BBC reported.
Prosecutors said Gordillo misspent union funds on luxury items and clothing, plastic surgery, real estate and a private airplane, which allegedly took place between 2008 and 2011.
As head of the SNTE, Gordillo has held strong influence over politicians that have sought electoral support from Mexico’s largest union.
The SNTE was formerly considered an inseparable voting bloc for the Institutional Revolutionary Party, or PRI, which governed Mexico for 79 years until 2000 and returned to power in 2012 with the election of President Enrique Peña Nieto.
Under Gordillo’s leadership, the SNTE has become a political force in its own right, able to swing a massive amount of votes from one party to another, and has been credited with securing election victories in 2000 and 2006 for former presidents Vicente Fox and Felipe Calderón, respectively, much to the chagrin of the PRI, given that they belonged to rival parties.
In 2005, Gordillo led the SNTE’s push to establish the New Alliance Party, firmly cementing the union as its own political entity.
Gordillo’s arrest comes one day after Peña Nieto signed into law sweeping education reforms that diminish the SNTE’s control over access to the teaching profession.
The SNTE had been able to successfully lobby against past attempts at education reforms that threated its primacy, but its recent legislative defeat reveals a lack of organization that has now been punctuated by its leader’s legal troubles.
The union has itself been accused by its detractors of engaging in corrupt practices, such as buying and selling teaching posts and embezzling funds through payments to non-existent teachers.
Nevertheless, the SNTE aims to mitigate the reforms’ erosion of its power.
Prior to her arrest, Gordillo criticized aspects of the education reform law that aim to establish standardized teacher evaluations as a requirement for employment in the field, which she characterized as an attack on teachers’ job security.
With Gordillo sidelined and under investigation, however, the SNTE will have a hard time challenging the administation's education reforms.