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Can a President Accused of Corruption Convincingly Push an Anti-Corruption Law? Mexico Is Finding Out

Mexico actually dropped in an international corruption perceptions index after its transition to a multi-party democracy began in 2000.

by David Agren
May 14 2015, 1:23pm

Imagen vía Presidencia de Mexico

Mexican President Enrique Peña Nieto is used to receiving warm receptions at events like the World Economic Forum, where executives and influential thinkers would laud his agenda of opening up Mexico to more foreign investment.

But when the president returned to the forum's Latin America version of its confab last week in Mexico's Mayan Riviera, Peña Nieto was forced to discuss a less-flattering issue that has sent his international image tumbling in the past year: corruption.

"Corruption is a matter of order, sometimes cultural, which is a scourge on our societies, especially in Latin America," Peña Nieto said on May 7 during the World Economic Forum on Latin America, in the resort city of Playa del Carmen.

"If we truly want to achieve a change of mentality, conduct, practices, and to assimilate new ethical values, there must be a structural change within society," he said.

With these sentiments, Peña Nieto is now selling an anti-corruption reform package for Mexico to international audiences, in the hopes of preventing a loss of confidence in a government courting global investors. The National Anti-Corruption System has been approved by Mexico's Congress and by at least 22 states.

The law is now being considered by the permanent commission of Congress, before heading to the president's desk for his signature.

Related: Mexico's President and First Lady Face Scandal Over Lavish 'White House' Mansion

Allegations of corruption and conflict of interest have hit Peña Nieto hard.

His administration has been unable to shake the veneer of wrongdoing since allegations surfaced that he, his wife, his finance minister and his interior secretary purchased homes from prominent contractors with preferential rates of interest.

The government has denied any wrongdoing. But the so-called "White House" tied to Peña Nieto's family since last November — and cases of state security forces killing civilians during his term — has forced him to publicly commit the government to combat corruption in the second half of his six-year presidency.

Mexico's transition to democracy has not helped its standing in terms of perceptions of corruption.

The issue is so problematic that Peña Nieto — whose own Institutional Revolutionary Party, or PRI, became synonymous with corruption in its seven decades of uninterrupted rule — is promoting legislation to combat a practice considered commonplace in public life but is increasingly condemned by a populace clamoring for accountability.

Of course, corruption in Mexico goes beyond the PRI and plagues all major political parties. It also costs the economy close to 1 percent of its annual GDP, according to estimates by the Center for Economic Studies of the Private Sector, a Mexican think tank.

The period considered Mexico's "transition to democracy," starting around the 2000 presidential election of opposition candidate Vicente Fox, did not assuage citizen concerns over corruption. In 2004 Mexico was ranked 64 in Transparency International's annual Corruption Perceptions Index.

Ten years later, in 2014, Mexico had tumbled to 103 in the index. By then, the PRI returned to the presidency in Mexico with Peña Nieto's election in 2012.

"The problem is that the biggest person accused of corruption is the president himself," Ilán Semo, a historian at the Iberoamerican University in Mexico City, told VICE News. "Instead of the PRI moving the anti-corruption campaign … the campaign is being put in the hands of the person who is accused."

Peña Nieto's credibility problems started with revelations last fall that First Lady Angelica Rivera bought a $6.3 million mansion — called the "Casa Blanca," by critics — from a government contractor. The same contractor also extended her credit, though Rivera insisted she made enough money as a soap opera star to afford the house.

The president's office argued the first lady is not a public servant, so she could not be in a conflict of interest.

Later, The Wall Street Journal reported that Finance Minister Luis Videgaray purchased a property in 2012 — just prior to his joining Peña Nieto's cabinet — from the same contractor. Videgaray received a loan with a preferential interest rate to make the purchase.

The Journal also found that Peña Nieto bought a golf club property from another developer while he was governor of the State of Mexico in 2005. The developer went on to win federal contracts after Peña Nieto became president, but denies anything improper in the bidding process.

Related: Mexico's President Appoints a 'Friend' to Investigate Corruption Allegations

The president then appointed a self-declared "friend" of Videgaray, Virgilio Andrade, to fill the vacant federal comptroller's position, tasking him with investigating the purchases. But Andrade later admitted he would not be investigating Peña Nieto's purchase because the president was a state official at the time of the transaction, not a federal employee.

Andrade has yet to rule definitively on the homes, but he did slap the ex-director of the National Water Commission with an approximately $42,000 fine for using a government helicopter to take his family to the Mexico City airport on the eve of Easter holidays.

Peña Nieto comments calling corruption in the country "cultural" also chafed critics — many of whom point to the millions of Mexicans living abroad and abiding by other countries' laws as proof to the contrary.

"If we accept that corruption is cultural, then we have to accept that the modernization of the country is not possible in the short term," columnist Carlos Elizondo wrote in the newspaper Excelsior. "We're the way we are, because that's how were are. There's no need for reforms."

A March poll published by Reforma showed Peña Nieto having a 57 percent disapproval rating, while 54 percent of respondents expected the anti-corruption measures approved by Congress to have no real impact against corrupt practices.

The law has still won cautious accolades as a "good first step" from anti-graft groups. It puts an emphasis on preventing possible corruption in the future, and places more transparency checks and controls on bidding for government contracts.

"We do have a sort of Roman circus atmosphere and the crowd demands to be sated," Federico Estevez, a political science professor at the Autonomous Technological Institute of Mexico, said in an interview. "For this to work politically, the same crowd has to obey new rules. […] It's a matter of going forward and not looking too severely at the recent past."

Old habits may die hard, however.

Reminders of the past scandals surfaced during debate on the bill in the Mexican Senate, when cameras captured Senator Carlos Romero Deschamps, head of the powerful and pro-PRI oil workers' union, flipping through photos of yachts. Deschamps once gave his son a Ferrari Enzo, while his daughter was caught travelling the world on private jets, pet pugs in tow.

The anti-corruption measures followed the approval earlier this year of a new access to information and transparency act, which forces institutions receiving public funds such as political parties, politicians and unions to open their books. It also increases sanctions for those not complying with transparency requests.

Whether the new rules actually cut down corruption and increase transparency remains to be seen. Some experts expressed doubts.

Mexico's Congress is expected to approve the use of re-election, which Estevez said could help Mexico curb some corruption, especially on the municipal level, since mayors would theoretically act to win another term in office, instead of plundering the public purse for three years, as currently occurs.

"Mexican politicians are very skilled at contravening the law by indirection, by going into the shadows, by reading between the lines, by infiltrating the regulatory bodies," Estévez said. "Why should that change?"

Related: 'People Are Fed Up': Jalisco Elections Could Upend Traditional Politics in Mexico

Follow David Agren on Twitter @el_reportero.

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