Mexican authorities have issued an arrest warrant for the former director of state oil firm Petroleos Mexicanos in what looks to be the most ambitious anti-corruption push yet by the new administration.
President Andrés Manuel López Obrador, who took office on Dec. 1 on vows to stamp out endemic public corruption but to not target former government officials, defended the case on Wednesday as the continuation of an investigation that began under his predecessor, Enrique Peña Nieto.
"There is no political persecution," López Obrador said during his early morning press conference. "These are facts, alleged crimes, that have to be pursued."
Attorney General Alejandro Gertz told Mexican broadcaster Televisa on Wednesday that efforts to locate former Pemex chief Emilio Lozoya have not been successful, but that the case against him is solid. Also on air with Televisa, Lozoya's personal lawyer, Javier Coello, suggested that Peña Nieto be called in for questioning.
Lozoya managed Peña Nieto's campaign for president before being placed at the helm of Pemex, from 2012 to 2016.
The case against Lozoya centers on the 2015 sale of a fertilizer plant by steel maker Altos Hornos Mexicanos SA, or AHMSA, to Pemex for what auditors say was an inflated price.
Investigators say Lozoya appears to have received a substantial personal payment for facilitating the purchase, at the expense of taxpayers. His accounts have been frozen.
AHMSA Chairman Alonso Ancira was detained in Spain on Tuesday, though AHMSA accounts were unfrozen early Wednesday so that the steelmaker, which employs more than 20,000 workers, can continue operations.
Coello said in a Tuesday statement that he had filed judicial actions contesting the account freeze and any potential arrest warrant for Lozoya. A judge in Mexico City issued a provisional suspension against his detention on Wednesday. Legal injunctions are frequently deployed in Mexico to prevent arrests.
Liliana Veloz, executive director of the Network for Accountability at Mexican research university CIDE, said what remains to be seen is whether the investigation will hold up or whether Lozoya and Ancira become "fat fish" that are caught and later released, serving as a political stunt for the new administration.
The apprehension orders are a way for the government to convey that "there is an idea of being able to dismantle large networks of corruption," she said. Beyond punitive actions, what the government needs is to prevent corruption, she added.
"Corruption has permeated all public domains," said Veloz.
Some lawmakers from Mexico's main opposition parties said they supported the attorney general's investigation, but questioned the timing of the arrest orders coming days before June 2 elections in six states.
"It's very odd, very strange, very fortuitous" that it happened right before the elections, said legislator Dulce María Sauri Riancho of the Institutional Revolutionary Party. But she added that people should give the attorney general the benefit of the doubt, because this was the first big case of the newly independent office.
Mexico scored 28 out of 100 points in Transparency International's 2018 Corruption Perceptions Index, where a lower score indicates higher levels of corruption. That puts Mexico on par with Russia and behind countries such as Honduras and Bolivia on perceptions of clean business.
Mexico's Financial Intelligence Unit said Monday that "there were various transactions with funds that presumably did not come from legal activities" in the frozen accounts and the funds "are presumed to have originated in acts of corruption."
Santiago Nieto, head of the unit, called the account freezes a hallmark of the "new" Finance Ministry. "The policy of the Mexico government is zero tolerance for corruption and impunity," he wrote on Twitter.
Nieto was a top corruption investigator in the administration of Peña Nieto until he was abruptly fired in 2017 in the middle of a probe into Lozoya's dealings while head of Pemex.
Nieto reopened the case in his new position with López Obrador.
López Obrador expressed support for Nieto's investigation and those of any other public servant who spots apparent misdeeds.
Public servants like Nieto have been told "not to cover anything up" or "protect anyone," and to immediately present findings of potential misuse of public funds to the attorney general's office, López Obrador said.
He added that the attorney general's office will decide whether to broaden the case to include other government officials who approved Pemex's acquisition of the Fertinal fertilizer business. Including capital improvements, López Obrador said Pemex has invested nearly $1 billion into a factory that was practically "junk" and not operational when purchased.
Lozoya and Altos Hornos have also been mentioned, but not charged, in corruption scandals involving Brazilian construction giant Odebrecht.
Lozoya has previously denied taking bribes from Odebrecht, while AHMSA acknowledged a $3.7 million payment for services to a company that has been identified as a possible vehicle that Odebrecht used to disguise illicit payments.
The so-called Car Wash investigation into illicit payments by Odebrecht to government officials has led to multiple arrests and prosecutions in Latin American countries over the past five years, but none in Mexico.