After stepping down from the Mexican presidency in December of 2018, Enrique Peña Nieto has been having a swell old time. Following his divorce from Angelica Rivera, the soap-opera star who stayed by his side just long enough for him to complete his term, Peña Nieto has been flouncing around the world in the company of a new girlfriend, with sightings in Spain, Belgium, and a comical episode in a Chinese restaurant in New York where the couple donned disguises to avoid being spotted.
Meanwhile, in the tattered nation he left behind, the walls are closing in around both his former administration and the party it returned to power: the once-hegemonic Institutional Revolutionary Party (PRI). Three occurrences in recent weeks have brought his former administration back into the headlines, shining a harsh spotlight on the impunity that reigned under his watch.
First, the former director of the state oil company Pemex during the Peña years, Emilio Lozoya, has been extradited from Spain to face charges of fraud, bribery, and operations with illicit funds involving the infamous Brazilian company Odebrecht, the construction giant involved in bribery scandals throughout Latin America. Second, former Chihuahua governor César Duarte has been arrested in Florida and is facing extradition charges of his own for the funneling of state money into PRI election campaigns. Third, new revelations have emerged surrounding the disappearance of forty-three students from the Rural Teachers’ College of Ayotzinapa which refute the version of events sustained by Peña Nieto’s administration. Let’s take a look at each of these in turn.
Emilio Lozoya: The End of the Party
On July 17, Emilio Lozoya landed in Mexico in handcuffs, five months after his arrest in Spain. It was a dramatic comedown for the one-time wunderkind and former head of Pemex, accustomed to private-jet travel and rubbing shoulders with the international elite at Davos. Augmenting his popularity in these circles was the “energy reform” law of 2013, which opened up the state oil company to the privatization of much of its production and supply process.
A year before, in 2012, Peña Nieto had “won” the Mexican presidency with a campaign that was a masterpiece of transactional corruption. Gorged with some four billion pesos in donations ($300 million at the then exchange rate), an amount exceeding legal spending limits some thirteen times over, the campaign used its bonanza to purchase votes through the distribution of prepaid debit cards. And Lozoya played a key role: as the campaign’s international-affairs advisor, he convinced Odebrecht to cough up $4 million in exchange for future contracts from Pemex. Once installed in the director’s seat, and in exchange for a further $6 million kickback, he served up the goods via a contract for work at the Tula oil refinery.
The corruption went even deeper. Lozoya was to have received some $3.4 million from the company Altos Hornos de México (AHMSA) between June and November of 2012. A year later, Pemex was kind enough to buy a fourteen-year-old fertilizer plant from the very same company for some $443 million — nearly twice its market value. Despite hundreds of millions of dollars spent on refurbishment, the plant remained in such poor shape that it has never been used. On top of that, AHMSA was also reported to have paid bribe money back to a shell company of Odebrecht.
The whole scheme was so complex that it requires an extensive flow chart to map it. Lozoya has always contended he didn’t act alone, and one can safely assume that, if the Mexican judicial system has the wherewithal to follow it, the chain would ultimately lead to Peña Nieto himself. It is to be recalled that Peña Nieto fired the director of the Special Prosecutor for Electoral Crimes’s office, Santiago Nieto, when the latter got a little too close to sniffing out the truth in 2017.
In exchange for being granted “cooperating witness” status and a reduction in any future sentences, Lozoya has accepted voluntary extradition back to Mexico. And the almost-audible fear rippling through Mexico’s political class is not limited to the above web of criminality, but to another scandal that is directly linked to it: the bribes paid to legislators to pass the 2013 energy reform law.
Indeed, Lozoya has already revealed that he paid over 52 million pesos ($3.9 million) in bribes to legislators from the National Action Party (PAN) to approve the measure; 6.8 million pesos were to have gone directly to Ricardo Anaya, the party’s presidential candidate in 2018 and then-speaker of the House.
In total, some $360 million pesos ($27 million) in subvenciones extraordinarias, or “special subsidies” were doled out to the PRI and PAN legislators who voted to pass the legislation, which effectively rolled back the historic oil expropriation of 1938.
In the same way that the relationship between Odebrecht and the Mexican government stretches back to the Felipe Calderón years, Lozoya’s initial revelations shed further light on the chummy symbiosis between the nation’s two right-wing parties, in collusion with the companies that cracked open Mexico’s lucrative energy industry to their advantage.
César Duarte: Public Money for PRI Campaigns
The risk of reporting on the venality of the Peña years is that will appear too incredible, too exaggerated, too outlandish to be believed. This is in part due to the fact that, at the time, the international media preferred to turn a blind eye to it, choosing instead to brand Peña Nieto’s early years as the Mexican moment. (Only after the Ayotzinapa tragedy of 2014 did the press begin to adopt a prudent distance from the man who had supposedly been “saving Mexico.”)
In this context, it’s worth reviewing what became of the crop of “new PRI” politicians who swept to power in the early in 2010’s. Of the nineteen governors from the party who posed with Peña Nieto at an inauguration day photo in the National Palace, ten have fallen foul of the law for charges ranging from bribery to diversion of resources to collusion with organized crime; several are already in jail.
Indeed, the once-fresh faces of the PRI restoration have now spawned a whole diaspora of fugitives. Roberto Borge, the former governor of Quintana Roo, was caught trying to board a plane to Paris from Panama, where he’d been hiding out in Trump Tower.
Javier Duarte, the former governor of Veracruz, was caught in Guatemala and sentenced to nine years for money laundering and criminal association. During his term, Duarte racked up an impressive collection of properties and art; meanwhile, has family continues to live at their luxury London home while his wife faces extradition on criminal charges of her own.
César Duarte, the former of governor of Chihuahua, has also fled. Now in the United States, where he has accumulated some fifty properties in Florida, Texas, and New Mexico — adding to his collection of luxury ranches and exotic animals back home — Duarte is facing charges for diverting 250 million pesos ($18.5 million) of state funds into PRI campaigns, part of a plan entitled Operación Safiro involving the governments of six other states.
Implicated in the scandal are the then-party president, Manlio Fabio Beltrones (nicknamed “Don Beltrone” for his similarity in comportment to a mafia boss), as well as Luis Videgaray, then finance minister and the power behind the throne to Peña Nieto.
The former president himself did everything possible to impede the investigation into Duarte, even going so far as threatening to withhold federal funds from the state during his last year in office in 2018. The two cases, Lozoya and Duarte, are mirror-images of each other: whereas the PRI used millions in dirty money to elect Peña Nieto, it raided the coffers of the states it governed to win elections at all other levels.
Ayotzinapa: Debunking the “Historic Truth”
On July 7, the attorney general’s office announced that the University of Innsbruck — a collaborating institute in the investigation into the 2014 kidnapping and disappearance of forty-three students from the Ayotzinapa Rural Teaching College — had identified the remains of one of the bodies. Crucially, the remains were not found where the Peña Nieto government had insisted the killings occurred but nearly a kilometer away, in a ravine known as the Barranca de la Carnicería.
Ayotzinapa marked the beginning of the end for Peña Nieto, not least because his government insisted on pushing a version of events, famously referred to as the “historic truth,” that was clearly self-serving. In its version, the students were apprehended by local police in the town of Iguala, turned over to the criminal organization Guerreros Unidos, and killed and burned in a garbage dump in the nearby town of Cocula. But this so-called “historic truth” had always been hotly contested, not least by the families of the victims, and when an international team of experts known as the GIEI got too hot under the collar for the government with its own investigation, it was bounced out of the country in 2016.
On July 10, extradition proceedings were initiated for Tomás Zerón, the former head of the Criminal Investigation Agency (AIC) who had been instrumental in formulating the “historic truth,” on charges of torture, forced disappearance, altering a crime scene, and the loss and concealment of proof in the case. Zerón had fled to Canada in March.
Meanwhile, new evidence based on fresh witness testimony alleges what the Peña administration always strenuously denied: that the army — specifically the 27th and 41st Battalions — was intimately involved in the detention of the students on the fateful night of September 26. Not only that, but a number of the members of these battalions were to have been directly on the payroll of the Guerreros Unidos in order to allow the transport of drugs, arms, and money throughout the region, as well as participating in the disappearance of the forty-three students.
In fact, it is suspected that one of the main reasons the army got involved in the first place was that the students had inadvertently seized a pair of buses that contained a shipment of heroin worth two million dollars.
These accusations put President Andrés Manuel López Obrador (AMLO) in a delicate spot. From the outset of his administration, he has leaned on the armed forces for everything from the construction of the new Mexico City airport to the transport of gasoline to, recently, sending the navy to seize control of the nation’s ports in a bid to fight corruption there.
Historically answerable only to a series of complicit presidents, the Mexican army is among the most hermetic of institutions, with its own court system and a secretary of defense who has always been an active-duty soldier. Whether AMLO will be able to pry it open to allow the corruption in its own ranks to be investigated will be a stiff test for his resolve.
Most urgently, it is Enrique Peña Nieto who is feeling the heat. On July 20, he celebrated his 54th birthday in seclusion, without the fanfare and hoopla of previous years. It’s not without irony that one hopes he enjoyed it. His coming year stands to be significantly less pleasant than the last.