By Andrés Oppenheimer
Mexico’s President Andrés Manuel Lopez Obrador’s popularity has not yet plummeted, despite his government’s poor record on almost every front. But I wouldn’t be surprised if his poll numbers take a big dive following the latest corruption allegations involving his own family.
Lopez Obrador’s 40-year-old son, José Ramón Lopez Obrador, is at the center of a scandal revealed by Mexicans Against Corruption and Impunity (MCCI), an independent advocacy group, and the Latinus.us news website. The allegations raise questions about the president’s frequent claims that he has eradicated corruption.
According to the investigation, a former top executive of the Texas-based Baker Hughes oilfield services company rented his nearly $1 million home in Houston to Lopez Obrador’s son from August 2019 to January 2020. During that time, Baker Hughes significantly increased its contracts with Mexico’s state-owned Pemex oil monopoly, the MCCI report says.
Lopez Obrador vehemently denies any wrongdoing by him or his son, but he has not yet disputed the key facts in the report.
Instead, the president has tried to divert public attention by threatening to cut diplomatic ties with Spain over vague charges of business exploits dating back to colonial times. He is also using his daily morning press conferences to accuse the authors of the report and other prominent journalists of allegedly being unpatriotic and serving foreign interests — the oldest trick in the populists’ book.
Under normal circumstances, I wouldn’t expect any possible consequences from these new allegations, because Mexican governments rarely investigate their own officials. A recent corruption-perception ranking by Transparency International, going from the most honest to the most corrupt, places Mexico in 124th place out of 180 countries.
But these may not be normal circumstances, because there is a U.S. company involved, and U.S. officials may get curious about the case, legal experts tell me.
Gilbert K. Squires, a U.S. international lawyer and former oil and gas executive, told me that under the U.S. Foreign Corrupt Practices Act, “It is probable that this could lead to a Department of Justice or Securities and Exchange Commission investigation, or both.”
The former Baker Hughes executive’s house was reportedly rented to the president’s niece, who is an oil consultant. The former U.S. company executive was quoted by Bloomberg as saying that he was unaware that he was renting his property to Lopez Obrador’s son.
MCCI researchers tell me that the details of José Ramón Lopez Obrador’s rental contract are murky, because they can’t get access to the documents. The house was reportedly rented for $6,187 a month, which is more than the Mexican president’s net monthly salary, the MCCI report says.
Asked whether any U.S. laws may have been broken, Joe DeMaria, a defense attorney and former U.S. prosecutor who specializes in bribery cases, told me that, “There’s nothing wrong with doing business with family members of foreign officials, as long as they do normal business transactions at a fair market value. If that’s not the case, the U.S. former Baker Hughes executive has got a problem.”
Whatever happens next, things are not looking good for the president or for Mexico.
Its economy has slipped into a technical recession, after it fell for two consecutive months at the end of 2021. It is expected to grow by a meager 2.5% this year, far below the 4% annual rate promised by Lopez Obrador at the beginning of his term.
Capital flight reached a record $12.6 billion in 2021, according to official figures. Inflation rose by 7.3% last year, the highest in two decades.
Lopez Obrador’s popularity rate already had dropped to 60% before the latest corruption allegations, from a high of about 81% at the beginning of his term, according to a new poll by the daily El Financiero. It is not unusual for Mexican presidents to have popularity rates of between 50% and 60% at this point in their terms.
But now, if the latest allegations prove any questionable government deals, Lopez Obrador’s numbers may fall further. His 2018 election campaign platform was based on his promises to put an end to Mexico’s chronic government corruption, restore economic growth, and drastically reduce violence.
All three of his main vows are now either in question — or have been shattered.
by Andrés Oppenheimer
Source: andresoppenheimer.com
