A dinner in an up-market Mexico City (CDMX) restaurant, and a luxurious wedding celebration in Guatemala, have triggered two separate scandals, both of which may weaken the anti-corruption efforts of the government of President Andrés Manuel López Obrador.
Emilio Lozoya, former director of state oil company Pemex (2012-2016) and close associate of former president Enrique Peña Nieto (2012-2018) must regret dining at Hunan, an up-market Asian food restaurant in CDMX on 9 October. Photographs of him sitting at a table and talking with friends eventually found their way onto social media and triggered a major political storm. This, because Lozoya stands accused of taking at least US$10m in bribes from Brazilian construction company Odebrecht while head of Pemex. Under investigation, he was extradited from Spain in July 2020, nearly a year and a half ago. Many Mexicans asked themselves how such a high-profile rule breaker could still be out of jail and living the good life?
The answer is that for over a year Lozoya had been negotiating the Mexican equivalent of a plea-bargaining deal, during which he had been allowed relative freedom of movement in CDMX, while wearing an electronic tag. He had offered testimony that on Peña Nieto’s orders, the Odebrecht money went towards funding election campaigns by the centrist Partido Revolucionario Institucional (PRI) and was also used to bribe members of congress to ensure they would vote to support Peña Nieto’s liberalising energy industry reforms.
For President López Obrador, Lozoya’s hoped-for testimony could be political gold. The president accuses his three predecessors of being part of a corrupt “neo-liberal” elite and is trying to reverse Peña Nieto’s energy reforms. He has made no secret of his belief that Peña Nieto and other former presidents should face trial. Indicting one or more former presidents would be seen as a major political victory for his government. In addition, prosecutors accuse Ricardo Anaya of the right wing Partido Acción Nacional (PAN) of taking a bribe to vote in favour of the energy reforms. Anaya, who is a potential presidential contender in 2024, has moved to the US to escape what he says are trumped up charges that amount to political persecution.
From López Obrador’s point of view, the problem has been that plea bargaining negotiations have dragged on and Lozoya has so far not produced the evidence prosecutors need. The restaurant incident forced a change in approach. The attorney general’s office (FGR) told a CDMX judge that Lozoya must now be considered a flight risk. On 3 November the judge agreed, ordering Lozoya’s immediate preventive detention. With the press in attendance, the former Pemex head was taken from the court directly to the Reclusorio Norte prison. The judge did however give the FGR and Lozoya’s legal team another 30 days to see if they could strike a plea-bargaining deal. Lozoya’s lawyers have since offered to pay a US$5m bond (part of which would be in the form of a property worth US$3.4m) in exchange for his release.
A second scandal then emerged, based on an unlikely location: the colonial city of Antigua in Guatemala, where a luxurious wedding had been held. The groom and bride were both prominent Mexicans, but the celebrations quickly turned sour. On 8 November it was announced that the groom, Santiago Nieto, head Mexico’s financial intelligence unit (UIF) had resigned. Nieto, until recently a close confidant of the president, had married Carla Humphrey, a senior official at Mexico’s national electoral institute (INE). The scandal was that the Guatemalan authorities had seized US$35,000 in cash from one of the guests, later identified as Juan Francisco Ealy Ortiz, president of Mexican newspaper El Universal. The newspaper later said the money was for medical treatment and had been properly declared. However, the incident remained somewhat unclear: another guest, CDMX tourism minister, Paola Félix Díaz, was reportedly arrested by the Guatemalan authorities who accused her of illegally trying to carry a large sum of money into the country. Félix denied any wrongdoing but presented her resignation to the head of the CDMX government, Claudia Sheinbaum, another potential contender for the presidency in 2024. Sheinbaum quickly accepted the resignation, saying Félix’s main error had been to travel to Guatemala by private jet, something that ran counter to the government’s principles of “austerity, honour and transparency”. She added “here, nobody can get on a private jet”.
The departure of Nieto, in effect the country’s top anti-corruption official, is a setback for the government and has been linked to various internal factional struggles. Nieto is reported to have earned the enmity of Alejandro Gertz, the controversial attorney general (head of the FGR). Asked by the president to prepare a report on a long-running family feud for control of Universidad de las Américas Puebla (UDLAP) he had advised that Gertz, with personal ties to a rival university (UDLA) had a conflict of interest.
There are also credible claims that the wedding scandal was ‘spun’ by rival media teams linked to the two main candidates within the ruling Movimiento Renovación Nacional (Morena) to succeed López Obrador in 2024: Sheinbaum and foreign minister Marcelo Ebrard. Nieto was regarded as being close to Ebrard (who had been invited to the wedding but did not attend). Since deputy foreign minister Maximiliano Reyes did attend, the Ebrard camp felt criticism of the wedding was deliberately targeting their man. Separate press briefings concerning Félix’s alleged involvement in carrying cash were therefore seen as a countermove intended to hit back at Sheinbaum.
López Obrador, who as recently as October had been fulsome in his raise for Nieto, took distance from him, describing the wedding as “scandalous”. A few days later López Obrador said “Santiago Nieto is an honest professional, we respect him, but we cannot tolerate any act of extravagance nor any act which goes against republican austerity”. He may also have been angered because some of the guests attending the wedding were well known conservative figures, such as Josefina Vázquez Mota, of the right-wing PAN, who ran against him in the 2012 elections (both were defeated by the PRI’s Peña Nieto).
While separate events, both scandals suggest progress against corruption under the López Obrador administration is going to be limited. Pablo Gómez Alvarez, a Morena economist, politician, and former 1960s student leader, has been appointed as the new UIF head. While López Obrador appears to have a genuine commitment to personal austerity, both scandals highlight his instinct to seek political advantage from big corruption cases, effectively trying to override the independence of the judiciary so as to hit out at his opponents. The frontrunners to succeed him within Morena also seem to favour politicising the anti-corruption drive. Despite the talk of austerity, the president has done little to tackle underlying, structural causes of corruption. His claim that corruption “stopped`’ when he took office will be subject to increasing scrutiny.
Surveys
Polls by lobby group Transparency International say that 44% of Mexicans believe corruption increased in 2020 relative to 2019, and 34% of respondents admitted to paying bribes to secure public services in the preceding 12 months.