Sat | Aug 8, 2020

Corruption trial of Pemex ex-oil chief begins

Published:Wednesday | July 29, 2020 | 12:12 AM
In this August 17, 2017 photo, Emilio Lozoya, former head of state-owned oil company Pemex, speaks at a press conference in Mexico City.
In this August 17, 2017 photo, Emilio Lozoya, former head of state-owned oil company Pemex, speaks at a press conference in Mexico City.

A Mexican court held the first hearing Tuesday in what President Andrés Manuel López Obrador said would be a “watershed” corruption case against the former head of the state-owned oil company.

López Obrador said that the trial of Emilio Lozoya, the former head of Petroleos Mexicanos, Pemex, “is a before and after” moment in what the president describes as the main priority of his administration, fighting corruption.

Lozoya has reportedly agreed to cooperate with prosecutors and will act as a protected witness in return for possible sentence reductions or elimination of charges. The court opened proceedings Tuesday via a video link because of coronavirus pandemic restrictions and the fact that Lozoya has been under treatment in a hospital for pre-existing conditions.

The Brazilian construction giant Odebrecht, investigated throughout the region in recent years for buying big government contracts with generous bribes, allegedly gave Lozoya US$4 million to put towards the 2012 presidential campaign of López Obrador’s predecessor, Enrique Peña Nieto of the Institutional Revolutionary Party.

Lozoya, who directed Pemex from 2012 to 2016 during the Peña Nieto administration, has always denied wrongdoing, but fled Mexico and led authorities on a months-long overseas manhunt. Spanish police arrested Lozoya in the Spanish city of Malaga in February, and he was extradited to Mexico in mid-July.

Tuesday’s hearing focused on charges in a 2015 case, in which a Mexican firm sold an overpriced old fertilizer plant to Pemex after allegedly paying Lozoya US$3.4 million in 2012. Lozoya allegedly used $2.58 million of the money to buy a property in an upscale Mexico City neighbourhood.

López Obrador said the new owner of that Mexican company has since offered to repay as much as US$200 million related to the 2015 purchase. The president said Mexico hopes to get back some of the money from bribes and crooked contracts, and he criticised the fact that Mexican corruption cases often play out in US courts – and that money recovered in those cases also often remains in the United States. He said he has instructed Mexican diplomats to try and get some of it returned to Mexico.

Odebrecht allegedly kicked in an additional US$6 million once Peña Nieto was in office. Some of that money was allegedly used to bribe federal lawmakers into voting for his signature energy reform package, known as the Pact for Mexico.

“Mr Lozoya is letting it be known that there were these bribes and that the money was used to buy the energy reform, and that the money was divided among the parties’ legislators,” López Obrador said last week. López Obrador opposed the reform, which opened up Mexico’s energy sector to greater private investment.

López Obrador said Tuesday the case “will help a lot, I repeat, in banishing corruption from Mexico,” adding that graft is a bigger problem for Mexico than the coronavirus pandemic.

“I am convinced that it (corruption) is Mexico’s main problem, it is not a pandemic ... it is a plague,” López Obrador said.