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August 12, 2020

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MEXICO: AMLO to seek fresh winds from allegations against predecessor

BY Nicholas Watson

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Alejandro Gertz, head of the National Prosecutor’s Office (FGR), on 11 August announced that the former CEO of state oil company Pemex, Emilio Lozoya, had filed a legal complaint against former president Enrique Pena Nieto (2012-2018) and one of his most powerful ministers, Luis Videgaray. Lozoya alleges that Pena Nieto and Videgaray, who was finance minister and later foreign minister, ordered him to funnel bribes from Brazilian construction and engineering company Odebrecht to the 2012 election campaign. Lozoya, who headed Pemex from 2012 to 2016, and who was arrested in Spain in February and extradited to Mexico in July, also claims that he channeled funds – presumably from the same source – to pay legislators to vote in favor of the 2013-14 structural reforms.

Lozoya’s allegations, which the FGR will now investigate, are a political boon for President Andres Manuel Lopez Obrador (AMLO) on several levels:

  • In the immediate term, Lozoya’s allegations are a welcome distraction from AMLO’s mishandling of the Covid-19 pandemic and its economic fallout. Confirmed Covid-19 cases currently stand at 492,522, which is likely to be a significant undercount; there have been 53,929 virus deaths, the world’s third highest Covid-19 death toll. Meanwhile, the consensus from the Central Bank (Banxico)’s latest survey of economists is that the economy will contract by 9.9% in 2020, followed by a feeble recovery (3%) next year.
  • The allegations will help restore AMLO’s signature anti-corruption campaign to prominence, at the same time as discrediting the other main political parties, led by the opposition National Action Party (PAN), whose support was necessary for the approval of the 2013-14 reforms. These are both crucial ingredients for the upcoming 2021 mid-term legislative election campaign in which AMLO will be looking to revive old tropes about the “mafia of power” led by the PAN and the Institutional Revolutionary Party (PRI).
  • AMLO will use the evidence that corruption was entrenched across successive PAN and PRI governments to justify once again the need for nothing less than “transformation.” This interlocks neatly with AMLO’s charge that Pena Nieto’s predecessor, Felipe Calderon (2006-2012), presided over a “narco-state.” As AMLO said in his press conference this morning, 12 August, the whole neo-liberal model was in the wrong, and by implication, what Mexico needs is root-and-branch reform.
  • More specifically, and most conveniently for AMLO, Lozoya’s allegations demonstrate that the energy reform was tainted by corruption, thus justifying ending the energy opening. Meanwhile, expect AMLO to deepen policies designed to “rescue” and restore Pemex to the position of greatness that he harks back to.

The extent to which AMLO actively exploits the case for these ends will likely depend on AMLO’s political fortunes over the coming months. No former president has ever been charged in Mexico, and AMLO has previously backed away from pursuing Pena Nieto. However, the political dividends may be too tempting for AMLO to ignore if he finds himself under pressure. There are also question marks over Gertz’s independence from AMLO, while Lozoya has enjoyed lenient treatment since his return to Mexico. Similarly, the notoriously corrupt Green Party (PVEM) supported the Pact for Mexico backing the 2013-14 reforms but is now an ally of AMLO’s National Regeneration Movement (Morena); whether investigations are allowed to take their course could be awkward for the party and AMLO.

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