Mexico congressmen charge mayors for federal funds

MEXICO CITY (AP) -- The mayor of the central Mexico city of Celaya thought he was having a private conversation when he told his staff that congressmen were requiring him to inflate a paving contract by 35 percent in exchange for $12.2 million in federal public works money.

Not only that, they demanded he go with the contractor of their choice.

But the conversation was recorded, leaked to the national Reforma newspaper, and its front-page story in January revealed one of the biggest corruption scandals to hit Mexico's Congress. According to mayors who have come forward in recent months, senators and congressmen routinely skim off the top of federal funds they allot to cities, money that can add up to three-quarters of the budget for local jurisdictions.

The federal Attorney General's Office announced late last month that it has been investigating the scandal known as "moches," Mexican slang for skimming off the top, since November at the request of the congressman at the center of the accusations, Luis Alberto Villarreal.

"It's unprecedented for something like this to come out into the open," said Barbara Botello, mayor of the city of Leon and head of the Mexican association of mayors. "The image of these institutions is being stained, but hopefully in some way this will move us closer to more transparency."

Over the decades, corruption scandals have tainted presidents, brought down mayors, seen generals jailed and led to charges against untold numbers of police. Just in the last two weeks, the Mexico City leader of the country's ruling party was accused of hiring women for sex and putting them on the party payroll, and federal officials detained Michoacan state's second-highest-ranking political leader to investigate his possible ties to the drug cartel that has terrorized the state.

But Congress has remained largely untouched until now. Mexicans have attributed that less to lawmakers' honesty than the fact that, in a country where inconvenient laws are generally ignored by powerful forces, lawmakers were not considered important enough to bribe.

Now, that perception has changed, leaving Mexicans wondering if there is any institution in the country left untouched by corruption.

Although no mayor has publicly admitted to participating in the payoffs themselves, local media citing anonymous officials with knowledge of the meetings have alleged that at least eight city leaders were solicited for bribes. Celaya Mayor Ismael Perez Ordaz didn't use the word "moche," but rather told his staff he needed to inflate the numbers to resolve "a political issue."

It's the kind of scheme associated with all aspects of Mexican life, employed by everyone from police to drug traffickers to extract unofficial fees from every day citizens. In this case, elected officials are demanding the extortions, with the implication that public funding will be cut off to cities that don't cooperate— shocking even those most jaded who are used to paying bribes even to get utility hookups.

President Enrique Pena Nieto, in office for nearly a year and a half, has pledged that his administration will not tolerate the corrupt practices that took place at all levels of government in the past. The moches investigation is the first of his term to focus on elected officials, although most named in the scandal so far belong to the National Action Party, or PAN, the rival party to Pena Nieto's Institutional Revolutionary Party, or PRI.

The PRI, which ruled uninterrupted for 71 years until losing the presidency in 2000, is considered to have written the manual on coercion and corruption.

"Corruption was the oil that lubricated all the gears of the Mexican political system for decades," said Jose Fernandez Santillian, a political scientist at the Monterrey Institute of Technology, adding that Mexico's 2001 transition to democracy, with a free press and largely independent judiciary, opened more opportunities for corruption to be exposed. "Scandals are a democratic reaction against corruption."

Celaya Mayor Perez Ordaz has confirmed the authenticity of the recording. He has said he did nothing illegal, despite having been solicited for a bribe.

Speaking on condition of anonymity, a series of municipal officials have told local newspapers that the much of the scheme was coordinated by Villarreal, the PAN's coordinator in the lower house of Congress.

Villarreal, who declined a request for an interview, has publicly denied any involvement. So far, prosecutors have not moved past the stage of asking mayors or other city officials to come forward with information. Prosecutors say they are looking at the possibility of filing charges of bribery, which carries a maximum sentence of 14 years in prison. They have not said whether any mayors have provided evidence.

Two mayors told the AP that the moches scheme was common knowledge, but denied that they themselves had participated.

Botello, the head of the Mexican association of mayors, said that four or five mayors had told her about being pressured to participate in the scheme, although she denied having been approached herself, and declined to say who had been. No mayor, she said, wanted to name the legislators who had approached them to demand a kickback.

"Many are afraid of reprisals, of their federal funding going down," she said.

Reforma and the newspaper AM reported in March that three mayors, including Javier Luevano Nunez of Calvillo in the north-central state of Aguascalientes, had been approached by Villarreal and asked to provide kickbacks in exchange for federal funding. The newspapers cited anonymous sources with direct knowledge of the meetings.

Luevano told the AP that he had heard of about the moches but called them "a phantom." He said he obtained $7.6 million in federal funds this year — three-quarters of the city's 2014 budget — simply by asking Congress. There was no other deal.

"I've never seen it," he said of such bribes.

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Follow E. Eduardo Castillo on Twitter: www.twitter.com/EECastilloAP