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Mexico faces challenges in tackling corruption

Wednesday - 6/26/2013, 4:25pm  ET

FILE - In this Oct. 15, 2006 file photo, Institutional Revolution Party (PRI) governor candidate Andres Rafael Granier Melo waves after casting his vote at a polling station on Villahermosa in the southern state of Tabasco, Mexico. 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. In the latest case, 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/Marco Ugarte, File)

E. EDUARDO CASTILLO
Associated Press

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 the southern state of Tabasco went before a judge at a Mexico City prison Wednesday and was arraigned on charges of tax evasion and use of illicit resources. He declined to enter a plea.

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.

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