When the Mexican lower house of Congress blocked an investigation last month into corruption allegations involving the Brazilian group Odebrecht, opposition politicians opted for an exercise in political theatre. They unfurled a huge banner reading “Children of the Master Scam” — a reference to a domestic corruption scandal — emblazoned with photos of a beaming President Enrique Peña Nieto and graft-tainted allies in similarly jocular poses.
The banner was a stunt designed to dominate the evening news headlines and to deflect government claims about a leading opposition politician. But it also captured the public mood in an election year: the anger at a seemingly never-ending succession of scandals, widespread impunity and official paralysis in graft investigations.
Voters who have traditionally had a high tolerance for ingrained corruption have become indignant. Just a week after the banner episode, the attorney-general’s office decided not to press charges of illicit enrichment against a former state governor, César Duarte, who is a fugitive from justice believed to be in Texas. Mr Duarte faces a string of other corruption charges.
At a time when the politics of many Latin American countries have been convulsed by corruption allegations — many of them originating in the investigation into Odebrecht in Brazil — Mexico has given the impression of conducting business as usual. The result could well be blowback for the political elite in July’s presidential election. Andrés Manuel López Obrador, a leftist populist running on an anti-corruption ticket, is the clear favourite to win.
The Mexican election is dominated by the perception of official apathy about graft and rising crime; the murder rate last year was higher even than at the height of the war on drug cartels a decade ago. Despite US President Donald Trump’s perceived hostility to Mexican immigrants and his threats to pull out of the North American Free Trade Agreement, which could plunge Mexico’s economy into trouble, this is an election being fought purely on domestic issues.
“Corruption is what makes me most mad,” says Aaron, an architect, who asked not to give his last name. “It’s the mother of everything. If the government is corrupt, you get poverty and a bad economy and that leads to crime and violence.”
Marco Fernández, an anti-corruption co-ordinator at México Evalúa, a think-tank, says that the 2012 presidential campaign was dominated by violence and insecurity. “Now, on top of that we have this huge issue of corruption. It’s not that it didn’t exist in the past, but the way it has come to light in these six years has been tremendous.”
Mr Peña Nieto, who was elected in 2012 and feted on the cover of Time magazine two years later as the man who was “Saving Mexico”, has taken steps to address the growing disgust over corruption and impunity. His ruling Institutional Revolutionary party, or PRI, points to a new anti-corruption system, which required changes to the constitution, giving more powers to prosecutors and holding companies and individuals liable foracts of corruption.
The Odebrecht scandal 1: Mexico
The Brazilian construction group has been implicated in bribery allegations across most of Latin America involving funds for election campaigns. Many current and former leaders and other officials are under investigation.
Mexico In 2017 the prosecutor who was investigating whether bribes from Odebrecht helped fund the 2012 election campaign of President Enrique Peña Nieto was sacked. Mexico’s former attorney-general says the investigation is finished but no charges have yet been brought.
But these remain incomplete — no anti-corruption prosecutor has yet been appointed at the helm — and they have done little to affect the public mood. It is not only the number of scandals that has angered voters, but the sense of a lack of accountability that is at odds with the assertion by Aurelio Nuño, the PRI’s election campaign chief, that there is “less and less impunity in Mexico”.
Mexico last year fell a dozen places down Transparency International’s global corruption perception index, to 135th out of 180. Some 44 per cent of businesses admit to paying bribes. Nine out of 10 crimes overall go unpunished according to official estimates.
Scandals have landed 16 current or former governors under investigation or behind bars. Javier Duarte, a former governor of Veracruz (no relation to César) and once a symbol for a supposedly revamped PRI, was jailed on charges that he defrauded the state coffers of more than $3bn, including cash for chemotherapy drugs for child cancer patients. He is in jail pending trial.
In the Master Scam scandal, a range of contracts from specialist engineering for state oil company Pemex to social development projects were allegedly farmed out to ghost companies and hundreds of millions of dollars was then siphoned off or funnelled into election campaigns. A former senior PRI official was arrested in December in connection with other allegations that federal funds were diverted from the state of Chihuahua, under the fugitive Mr Duarte’s rule, to party election campaigns.
As a result Mr Peña Nieto, who argues that it is the perception of corruption that is intensifying, not the scale of the problem itself, has become a symbol for many Mexicans of establishment complacency. After a hole opened up in a new expressway last year and a car fell into it, killing two people, he said such things happened worldwide. When 43 students disappeared in 2014 at the hands of corrupt local police in cahoots with a drug gang — the worst human rights atrocity by the authorities in half a century — the president at first tried to pass it off as a little local problem.
The Odebrecht scandal 2: Brazil
Former president Dilma Rousseff was impeached in December 2016 amid the fallout from the Odebrecht revelations. Her successor Michel Temer also faces accusations that he took bribes from the company, which he denies.
The Lava Jato (Car Wash) probe into bribes paid by Odebrecht and other companies to state-owned Petrobras has led to a 10-year prison sentence for former president Luis Inácio Lula da Silva as well as a string of other senior politicians. He is appealing against the verdict.
He and his wife were investigated by the government on charges of conflict of interest after revelations that they had luxury homes paid for by a favourite government contractor sparked outrage. They were subsequently cleared, but Mr Peña Nieto’s popularity has never recovered.
The PRI governed Mexico for most of the 20th century before losing power in 2000 and spending a dozen years in opposition. “It won in 2012 despite people knowing the party had a history of corruption,” says Roy Campos of Consulta Mitofsky, a leading pollster. “It’s not corruption that upsets voters, it’s impunity. That is driving anger against the political class.”
Perhaps nothing illustrates the paralysis in Mexico more clearly than its lack of response to the Odebrecht scandal and the contrasting strides that Brazil has made to root out and punish corruption.
Odebrecht has admitted to having paid about $788m in bribes in exchange for public works contracts across Latin America — revelations that led to both the resignation of Peru’s president Pedro Pablo Kuczynski and Ecuador’s former vice-president Jorge Glas being jailed for six years.
In Brazil the four-year-old Lava Jato (Car Wash) probe into systematic corruption that uncovered the bribery operation at Odebrecht has decimated the political and business elite, securing more than 100 convictions, including that of former president Luiz Inácio Lula da Silva, who had been hoping to win re-election this year.
The Odebrecht scandal 3: Peru
Pedro Pablo Kuczynski resigned as president in March over payments his bank received from Odebrecht while he was a government minister. Opposition leader Keiko Fujimori also faces allegations that she took money from the company, which she denies.
Alejandro Toledo, president from 2001 to 2006, faces charges that he received $20m in illicit funds from Odebrecht, while his successor Ollanta Humala was arrested last year on charges of taking bribes and is in prison awaiting trial.
But while the investigation in Brazil has been led by young, foreign-trained prosecutors and judges working in a judicial system that is relatively independent, Mexico is struggling to make its anti-corruption programme work with notoriously weak courts and police.
Santiago Nieto, the Mexican prosecutor investigating whether bribes by the Brazilian construction company funded the 2012 election campaign of Mr Peña Nieto (no relation), was abruptly fired last September — and now says he was offered money to keep his mouth shut.
A month after his dismissal, Raúl Cervantes resigned as Mexico’s attorney-general, saying that he had finished his investigation into Odebrecht, and that the case was ready for charges to be brought within days.
In the six months since, not only have no charges materialised but Emilio Lozoya, the former head of Pemex who denies allegations by former Odebrecht executives that he took $10.5m, has filed an injunction and secured a ruling from a judge indefinitely blocking any move to arrest him. And on the day opposition politicians unfurled the Master Scam banner in Congress, the PRI and its allies had voted to stop the state auditor’s office pursuing criminal sanctions against officials over a deal involving an Odebrecht subsidiary.
The Odebrecht scandal 4: Ecuador and Colombia
Ecuador: Jorge Glas, the country’s former vice-president, was sentenced to six years in jail in December 2017 on charges that he took $13.5m from Odebrecht.
Colombia: Corruption is a top concern ahead of Colombia’s May 27 presidential vote amid allegations that Odebrecht funded the 2014 election campaigns of President Juan Manuel Santos and his main rival Óscar Iván Zuluaga.
Civil society groups blame legislators for obstructing attempts to advance the agenda. Three years since the anti-corruption system was established by law, there is still no anti-corruption prosecutor — a post which is supposed to be independent — at the helm. At the attorney-general’s office, Mr Cervantes has not been replaced and a planned reform to transform the office into a fully autonomous agency has stalled.
Even when it has taken action, the attorney-general’s office has faced accusations that it has political motivations. In contrast to the slow progress on Odebrecht, it has been swift to pursue a money-laundering probe into Ricardo Anaya, a presidential candidates lying second in most polls, in connection with a property transaction. Mr Anaya denies the allegations.
The irate mood has been a boon for Mr López Obrador, the outsider candidate. He is some 10 points ahead with the support of 40.1 per cent of voters, according to a latest poll of polls by Oraculus, an election tracker. “López Obrador isn’t there because people think he’d be good at fighting insecurity or generating jobs,” says Mr Campos. “He’s capturing all the anger against impunity.”
Mr López Obrador told bankers at their annual conference last month that Mexico’s budget was losing at least 500bn pesos ($27bn) a year to graft — a sum he said would fund development.
Still, even Amlo, as the candidate is widely known, is not immune from scandal. He sparked incredulity by naming a former union boss who had fled to Canada after being accused of embezzlement on his party’s proportional representation list for the Senate. A former private secretary served eight months in jail a decade and a half ago after being caught on camera receiving wads of banknotes.
In his bid to secure victory, he has also teamed up with associates of Elba Esther Gordillo, a powerful former teachers’ union boss who was detained on corruption charges early in Mr Peña Nieto’s presidency and is now under house arrest, awaiting trial.
Similar clouds hang over the other candidates. José Antonio Meade, a technocrat tapped by the PRI despite not being a party member precisely because of his reputation for honesty, has also been tainted by association with the scandals and has come under fire from critics for failing to halt alleged scams while he was finance minister.
Mr Anaya maintains he did nothing wrong in two property deals that have been in the public eye. But as Luis Almagro, head of the Organisation of American States, says of Mexico’s graft problem: “It’s better to investigate a candidate than a president.”
In such an environment, voters are unimpressed by government claims of economic progress. Mr Peña Nieto is on course to meet his goal of creating 4m jobs by the end of his term, while his opening of the long closed energy sector to private companies has garnered more than $200bn in committed investment so far. But many Mexicans see unmet promises and feel a spike in inflation that has outstripped wage growth.
“In the golden era of the PRI, people said politicians stole but got things done. Now the feeling is that because they steal, they’re not getting things done,” says Jorge Buendía of pollster Buendía y Laredo. “Corruption has gone from being a problem that coexisted with others to be something contributing to a lack of growth, to institutions not working and to insecurity.”
Mr López Obrador’s reputation as an unpredictable populist may alarm executives and spook some voters. But many Mexicans agree with Alfonso Romo, his top adviser, when he says: “The real danger for Mexico is to stay as we are.”
Violence hotspots: Tourist areas become sites for war on drug cartels
Swapping the sub-zero temperatures in New Brunswick, Canada, for the balmy beaches of Los Cabos for the third winter running, Suzanne Gogan says she has noticed a steep increase in the presence of heavily armed, camouflage-clad police in the Mexican tourist resort. “We don’t feel intimated. We feel it’s a good thing,” she says.
Situated on the southernmost tip of the long finger of land stretching down into the state of Baja California Sur, Los Cabos last year was transformed from idyllic paradise to a battleground for the drug cartels. The number of murders with firearms in Los Cabos rose eight times in 2017 compared with 2016.
Locals time the change to August 6 last year, when hitmen burst on to Playa Palmilla, one of Los Cabos’s most famous beaches, and gunned down three people in a hail of automatic fire. Just before Christmas, four bodies were strung from two bridges. “Last year, you could feel the fear,” says Jesús, one resident. Driving the killings were turf wars involving the Jalisco New Generation and the Sinaloa cartels, the latter engaged in a bloody battle for control since the capture of Joaquín “El Chapo” Guzmán, the Sinaloa boss, in January 2016.
So far this year, the situation has improved. In late January, the federal government rolled out Operation Titan Shield — the police offensive seen by Ms Gogan — in Mexico’s most violent hotspots, such as Los Cabos. It says the plan is already noticeably curbing homicides, kidnappings and extortion.
Mexico’s “kingpin” approach — a focus on going after cartel bosses — has succeeded in jailing a string of top villains but has also been blamed for fragmenting criminal groups, sparking turf wars and spreading violence. Moreover, critics say that relying on the military to do policing in the worst-hit areas — an approach that has been enshrined in a controversial internal security law passed late last year — is a stopgap solution and ripe for abuse.
“The clear priority needs to be bringing down violence . . . Mexican politicians need to get their act together,” says Vanda Felbab-Brown, a senior fellow at the Brookings Institution. But with the nationwide murder rate in the first two months of this year up nearly 18 per cent compared with the same period in 2017, she adds that “they find a public that is enormously sceptical and feels betrayed”.