Category Archives: Corruption

Pemex board reportedly opens corruption investigations

According to columnist Ana Paula Ordorica, the Pemex board of directors opened investigations into three issues that occurred  when Emilio Lozoya was head of the state oil company:  contracts with the Brazilian contractor Odebrecht, the purchase of two fertilizer companies,  and the acquisition of nine aircraft.

Lozoya, a close personal friend of Enrique Peña Nieto, was CEO of Pemex from the beginning of the EPN government in Dec. 2012 to Feb. 2016.

Odebrecht has confessed to paying US$10.5 million in bribes to Pemex officials,  during both the Calderón and EPN governments. (The Odebrecht contracts have been put under seal.) Little apparent progress has been made by Mexican authorities in pursuing a corruption case that was handed them on a silver platter.

In Jan. 2014 and Jan. 2016, Pemex inexplicably purchased two fertilizer manufacturing companies for a total of US$730 million, for reasons that have never been explained adequately.  (The documents justifying the purchase were also placed under seal for 12 years.)  In January 2017, the company hired UBS to sell the money-losing operations.

Finally, Pemex purchased 5 airplanes and 4 helicopters while Lozoya was CEO for almost US$100 million “to strengthen Pemex’s operational capabilities.” However, according the audits of the company, at least four of the aircraft were never entered as assets in the company’s books, and they appear to have been used for personal purposes.

Pemex puts Odebrecht contracts under seal until 2020

In response to requests for information about its Odebrecht contracts under the transparency laws, Pemex Industrial Transformation (the refining arm) acknowledged two contracts but said that they had been put under seal until February 2023.  The company said that “to disclose the contracts would put at risk the investigations being carried out by PGR and SFP,” (the Justice Ministry and the Public Function Secretariat).

Perhaps another sign that the investigation of the bribes that Odebrecht confessed paying between 2010 and 2014 will be less than vigorous.

Veracruz boneyard rekindles anxieties about killings, insecurity and corruption

The disclosure that more than 250 skulls have been discovered just outside the port district of Veracruz has once more reminded Mexicans of how poorly their government functions in terms of providing security and solving crimes.

Veracruz fosaThe remains were found by a human rights group over many months, acting on a tip from traffickers. A spokesman for a group of mothers searching for missing children said:

“What we have found is abominable and it reveals the state of corruption, violence and impunity that reigns not only in Veracruz, but in all of Mexico,” Ms. Diaz said.

“A reality that speaks of the collusion of authorities with organized crime in Veracruz, for it is impossible to see what we found without the participation of authorities,” she said.

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Government starts looking at Odebrecht bribes in Mexico

Attorney General Raul Cervantes flew to Brazil to meet with prosecutors there, seeking more information about the corrupt activities of Odebrecht, the Brazilian contractor,  in Mexico.  While the Odebrecht scandals have led to major investigations in Peru and Colombia, in addition to Brazil, the interest to date of the Mexican authorities has been minimal.  This despite the very clear description included in Odebrecht’s plea bargain with the U.S. Department of Justice that was made public by DOJ in December:

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Transparency International gives Mexico scathing evaluation on corruption

Mexico was the worst performing country in the Americas, sliding to a corruption score well below the other major Latin American countries in Transparency International’s 2016 annual report on global perceptions of corruption.  The blindness to corruption evident in EPN’s handling of the Casa Blanca scandal involving his wife’s home in 2014, El Chapo’s unbelievable prison escape in 2015, the egregious conduct of a number of state governors, and the apparent inability to prosecute and convict almost any public official on corruption charges have greatly undermined the country’s image.  Regional scores are here.

Restarting the blog: Why now?

After a long hiatus, I’ve decided to restart this blog on Mexican politics. 

Why now?  The current moment in Mexico is the most critical in decades: 

  • Weak, lame-duck President without a game plan for final two years of his term;
  • Political fragmentation, with the next president likely to be elected with under 30% of the vote;
  • Inability of the political system to address drug violence and public corruption;
  • Country’s (and government’s) financial position still solid, but slipping;
  • Chronic slow economic growth;

And, of course,

  • Donald Trump’s repeated attacks on NAFTA, Mexican migrants in the U.S., and—indeed—the dignity of the Mexican people.

While I am an optimist at heart about Mexico, today for the first time in many years the risk exists that the country will take a sharp turn in the wrong direction, putting at risk decades of progress in economic modernization and integration into the world economy, tens of billions of dollars of investment, the advent of democratic governance, and close, constructive relations with the United States.