President Enrique Peña Nieto’s efforts to turn the page on apparent conflicts of interest bedeviling his government appear to have backfired.
Political analysts and newspaper editorials Thursday declared Peña Nieto’s campaign a failure and warned that he faces a “bankruptcy of trust” with the public.
Earlier in the week, Peña Nieto named a new comptroller to probe the purchase of luxury homes by himself, his wife and his finance minister. The swearing-in of the new comptroller – replete with scenes of backslapping – only raised suspicions of a potential whitewash.
In a meeting with foreign correspondents late Wednesday, comptroller Virgilio Andrade Martínez acknowledged a nearly three-decade friendship with Finance Minister Luis Videgaray. He said he would not probe whether Peña Nieto, his wife and the finance minister actually paid for the homes they received from major government contractors.
Andrade is a longstanding member of Peña Nieto’s ruling Institutional Revolutionary Party, known as the PRI, and serves at the whim of the president. At his swearing-in, Peña Nieto made clear that the investigation would find nothing untoward.
“In the exercise of my duties, I have always conducted myself with impartiality and in accordance with the law,” Peña Nieto said.
Peña Nieto said he was aware that news reports have “generated the appearance of something improper,” but he noted, “The president doesn’t grant contracts, decide on procurement or public works.”
Conflict-of-interest allegations surfaced in November when an investigative news team at Aristegui Noticias reported that Peña Nieto and first lady Angélica Rivera, a former television soap opera star, had obtained a posh home in Mexico City from a unit of a major government contractor, Grupo Higa.
Rivera angrily denounced the report, saying that she’d earned enough in her television career to pay for the mansion and that Peña Nieto had no stake in it. Nonetheless, she said she would sell the home, valued at about $7 million.
Finance Minister Videgaray acknowledged a Wall Street Journal report in December that he’d acquired a property from a unit of Grupo Higa but had paid off the loan. This week, Videgaray said that the company loaned him the money at a 5.31 percent interest rate, less than half the market rate for home loans available to ordinary Mexicans in 2012, when the transaction took place. He has not made public the mortgage document or any proof of payment on the loan.
Peña Nieto said last month, after another report by the Wall Street Journal, that he bought a house on a golf course in Ixtapan de la Sal, an exclusive weekend resort, from another contractor, Roberto San Román, weeks after taking office as governor in the surrounding State of Mexico.
The reaction to Peña Nieto’s naming of Andrade as federal comptroller has been tepid, and even dismissive.
“It is foreseeable that the investigation will be negative, and this will leave many (people) unsatisfied,” the Vanguardia newspaper said in an unsigned editorial Thursday.
“We all know what the conclusion will be,” said Gerardo Esquivel Hernández, a Harvard-trained economist at the Colegio de Mexico, an elite university. “By naming someone who is subordinate to the president, and a friend of the minister, they ensure they will be exonerated.”
Esquivel said the tapping of someone with deep ties to the PRI and a friendship with Videgaray “is another conflict of interest.”
In his meeting with correspondents, Andrade said he met Videgaray in 1987 when the two attended the Mexican Autonomous Institute of Technology, or at an even earlier date when the two appeared on a television show together.
“Yes, we are friends. And since then, we have maintained permanent ties,” Andrade said.
In a research note, the New York City-headquartered Eurasia Group consultancy said: “Andrade’s appointment confirms how powerful and influential Videgaray remains in spite of the accusations and his reduced credibility. It is hard to expect Andrade taking actions that could harm either of them politically.”
“We think these conflict-of-interest allegations represent one of the key risks to the country’s policy trajectory. The accusations directly target the president and his main advisers,” the note added.
Andrade said he would conduct a thorough investigation and provide the results to an independent committee of experts on transparency and ethics, to be named shortly. Congress would then decide to take action or not.
Three months after the conflict-of-interest scandals broke, none of Mexico’s three major political parties has pushed for an investigation.
“All political parties have some skeletons in the closet,” said Juan E. Pardinas, head of the Mexican Institute for Competitiveness, a policy advocacy group.
“It feels kind of like omerta, the Mafia agreement to silence in which everybody protects everybody,” Pardinas said, adding that Congress only now is making weak moves toward an investigation. “This should have happened in November, not in early February.”
Pardinas’ group has joined with the Mexican branch of Transparency International to urge the nation’s 128 senators and 500 Congress members to document their personal assets and list their salaries and income on a website (www.legisladortransparente.mx). But by Thursday, only two senators and two congressmen had done so.