Mexico faces challenges in tackling corruption

Pace of scandals picks up in Mexico, aided by social media, political opening

Associated Press
Mexico faces challenges in tackling corruption
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FILE - In this May 22, 2013 file photo, bundles of 500 peso bills are displayed to the press after they were found at the offices of a former state official in the capital city of Villahermosa, Tabasco state, Mexico. The cash was found in an office of Jose Saiz, who was finance secretary under former Gov. Andres Andres Granier of Pena Nieto's Institutional Revolutionary Party (PRI). Granier, the former governor of southern Tabasco state, was charged this week with money laundering and embezzlement and woke up Wednesday, June 26, 2013 in a Mexico City prison. (AP Photo/America Rocio, File)

MEXICO CITY (AP) -- It's a scandal a day in Mexico: an ex-governor sent to jail, another under investigation, mysterious money popping up in senators' bank accounts, politicians passing stacks of bills on YouTube.

Scandals are nothing new to Mexican politics, but the pace of revelations is accelerating as a more robust democracy and social media have emboldened Mexico's watchdogs, who are increasingly trying to bring the officials to justice or at least publicly shame them. And much of the new attention focuses on scandals in states, where the powerful grip of governors often had masked wrongdoing in the past.

In the latest case, the former governor of southern Tabasco state was charged this week with money laundering and embezzlement and woke up Wednesday in a Mexico City prison.

Andres Granier left his state of Tabasco with a financial disaster, according to the governor who replaced him and launched an investigation. As allegations of missing millions flew across the media, radio and television stations began broadcasting a recording of Granier boasting about owning hundreds of suits and pairs of shoes and about shopping at Beverly Hills luxury stores.

The 65-year-old politician and chemist said his statements were merely drunken boasts at a party, and were untrue. He denies having anything to do with the alleged embezzlement of about $156 million (2 billion pesos) in federal funds. But when he returned from a Miami home to testify in the case, prosecutors grilled him for hours and then detained him.

Even officials of his Institutional Revolutionary Party, which holds Mexico's presidency, distanced themselves from Granier.

Granier's reputation was not helped when state prosecutors last month reported finding about $7 million (88.5 million pesos) in cash at an office used by the man who had been his state treasurer. The official's attorney insisted the bundles of cash had been come by legitimately, that his client is independently wealthy.

But it is just one of many scandals swirling around officials from all of Mexico's major parties.

The daily newspaper Reforma this month reported that the federal Attorney General's Office was investigating the 26-year-old son of the former governor of Aguascalientes over bank deposits of at least $4.3 million during the last three years of his father's term.

An official with federal prosecutors, who was not authorized to be quoted by name, confirmed that the son, Luis Reynoso Lopez, was being investigated for possible money laundering. The official said there is also an open investigation of the former Gov. Luis Reynoso Femat, who was elected to office as a member of the conservative National Action Party.

Mexican news media reported that the son had bought four homes and two lots in San Antonio, Texas. In a search of San Antonio property records, The Associated Press found three properties in the name of Luis Armando Reynoso Lopez: a lot with an estimated value of $126,350, another valued at $19,330 and a home valued at $999,460.

The former governor has insisted the money is legitimate, product of the family real estate business he left in the hands of his son when he began serving as governor.

Four days after the probe in Aguascalientes was made public, Mexican newspapers reported that federal senators from National Action had mysteriously received bank deposits of $32,000 (430,000 pesos) each, just at a moment when the group was embroiled in a power struggle with their party's national leader, who had removed the bloc's coordinator, Ernesto Cordero, against their will. The man installed to replace him, Jorge Luis Preciado, alleged the money came from Cordero.

The lawmakers said they were shocked by the discovery and several announced they would immediately return the money. Cordero, a former treasury secretary, denied he ordered the deposits.

"The most important thing about all of these cases is how they are examples of the weakness in the checks and balances in each of the states," said Alejandra Rios Cazare, of the Center for Research and Education in Economics, known as CIDE.

When it comes to holding public officials accountable, there have been some improvements in the last 15 years at the federal level. The salaries of public federal officials are published online as is the progress of public programs.

At the state level, however, checks and balances remain murky. While Mexico's congress has passed a law requiring state governments to disclose how they are spending the federal money they receive, the measure's enforcement has been put off until at least next year.

For decades, Mexicans associated corruption with the Institutional Revolutionary Party, or PRI. That was largely because no other party held power even at the state level for 60 years, until 1989. The presidency remained in PRI hands until 2000, and it returned to the PRI last year. Mexico's gradual political opening meant politicians of other parties would face the temptations of power.

This month, the media again focused on a YouTube video, allegedly recorded in 2010, in which Cancun Mayor Julian Ricalde appears to be taking wads of cash from his predecessor, Jaime Hernandez.

Ricalde, of the leftist Democratic Revolution Party, acknowledged taking the money but said it was to pay for the government transition. Hernandez told reporters it was extortion money.

For Ricardo Corona, of the Mexican Institute of Competitiveness, the problem goes beyond parties and people and comes from how public resources are managed at the local and state level.

"You have a discretional and opaque margin of action ... You have incentives as a government official because you know the sanction level is low," said Corona, who has focused on reviewing the management of state and municipal public finances.

So far, there has been spotty progress in punishing corrupt officialsm and that has generated distrust and alienation among citizens and the political class.

An example of that, said political analyst Jose Antonio Crespo, was the campaign to run a cat for mayor of Xalapa, the Veracruz state capital. The spoof has drawn more than 140,000 likes on Facebook.

"This society has been so hurt by corruption and so hurt from seeing situations that are so shameful that I think we are looking for blood," said Rios. "We want to see Granier hanging from a toe and we're not necessarily looking for justice."

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Associated Press writer Adriana Gomez Licon in Mexico City contributed to this story.

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