U.S. Markets closed

UPDATE 3-Powerful Pemex union boss resigns amid graft charges in Mexico

(Recasts headline, lead to reflect new sourcing)

MEXICO CITY, Oct 16 (Reuters) - The longtime head of Mexico's powerful oil workers union, Carlos Romero Deschamps, has resigned, a ruling party federal lawmaker said on Wednesday, a day after the president hinted he should step down to face allegations of wrongdoing.

President Andres Manuel Lopez Obrador this week said Romero Deschamps was under investigation, and on Wednesday revealed the union boss could face prosecution over two complaints filed against him.

Tatiana Clouthier, a legislator in the lower chamber of Congress from Lopez Obrador's MORENA party, confirmed the union leader's departure in a post on Twitter.

"Romero Deschamps is leaving," she wrote.

Along with "other people," Romero Deschampos faces two complaints for "the crime of (financial) operations with funds of illegal origin," according to information provided by the financial intelligence unit of Mexico's finance ministry.

Earlier this year, sources said the attorney general's office had accused the union leader and several relatives of illicit enrichment and money laundering.

Romero Deschamps has previously denied all charges.

The oil workers union did not immediately respond to a request for comment, and has not yet issued any statement following a closed-door meeting held Wednesday morning at its Mexico City headquarters and attended by all of its 36 sections.

Calls to Romero Deschamps went unanswered.

Lopez Obrador on Tuesday suggested that the veteran union leader and politician might consider quitting to address the allegations.

Romero Deschamps, a former senator with the opposition Institutional Revolutionary Party (PRI), which ruled Mexico for most of the past century, has led the oil workers union since 1993.

Past media reports of the lavish lifestyle of Romero Deschamps and his family, which included trips on private jets and the purchase of a yacht and luxury sports cars, despite his modest official salary, have stoked accusations of corruption.

Lopez Obrador, who was himself a PRI member until the late 1980s, won office by a landslide in 2018 after years of campaigning against corruption.

The veteran leftist has promised to boost the fortunes of the highly-indebted national oil company Pemex, which has suffered more than a dozen years of declining oil output, at a time when the company's payroll continued to rise.

For decades Pemex has been dogged with accusations that it is a hotbed for graft and kickbacks. Most of Pemex's employees are members of the oil workers union.

Manuel Limon Hernandez, a close confidant of Romero Deschamps, was picked to succeed him, according to the media reports, which cited sources inside the union.

Limon Hernandez, who served as the union's treasurer for over a decade up until last year, is also a federal congressman with the PRI representing the oil-rich state of Veracruz. (Reporting by David Alire Garcia and Sharay Angulo; Editing by Alistair Bell and Sam Holmes)