Mexico: Overview of corruption and anti-corruption efforts

Query

Please provide an overview the current situation regarding corruption and anti-corruption efforts in Mexico.

Caveat

This Helpdesk Answer draws heavily on an earlier December 2018 Helpdesk Answer, “Integrity Risks for International Businesses in Mexico”, by Roberto Martinez B. Kukutschka.

Overview of corruption in Mexico

Background

It is difficult to understand the current governance situation in Mexico without understanding how the state has evolved since the cusp of the 20th century. Following the Mexican Revolution (1910 to 1917), a new socially progressive constitution was approved and the Institutional Revolutionary Party (Partido Revolucionario Institucional, PRI) used the legitimacy it gained during the revolution to impose itself on the newly democratic system.

From 1929 to 2000, Mexico was a one-party system dominated by the PRI, which had deep penetration into all levels of the state as well as social and labour organisations. While civic participation by opposition parties was permitted, significant barriers existed to bar these parties from participating in elections. Furthermore, the PRI guaranteed its control through systematic and entrenched networks of clientelism of local and state authorities.

Growing discontent with the single-party system, a wave of neoliberal reforms and economic crises, as well as the liberalisation of electoral barriers in the late 1980s, led to a surge of electoral support for the National Action Party (Partido Acción Nacional, PAN) and the Democratic Revolution (Partido de la Revolución Democrática, PRD), eventually leading to the first non-PRI president to be elected in 2000.

The 2000s were marked by two PAN presidencies, which further applied liberal economic reforms and a programme of administrative and fiscal decentralisation at the state and municipal levels. Poverty and inequality levels did not improve, and there was a surge of violent crimes related to the drug trade. During the presidency of Felipe Calderón (2006-2012), the security strategy of the government changed by sending the army to the street to fight the growing influence of drug cartels. Since 2006, Mexican politics have been dominated by the “drug war” against drug cartels: the drug war has led to more than 164,000 deaths (IBRD 2018) and 36,000 disappeared people (Briscoe and Keseberg 2019).

In 2012, Enrique Peña Nieto became president, marking the return of the PRI to the presidency after 12 years. Peña Nieto launched a series of reforms based on the “Pacto por México”, a political agreement signed by the three main political parties and various state governors in December 2012. This included reforms in education, labour, tax, health, telecommunication, energy and justice sectors, as well a new national anti-corruption system (Sistema Nacional Anticorrupción, SNA), which was driven forward by a broad coalition of citizens, the organised civil society and different political parties.

These reforms were overshadowed by the various human rights violations, notably the Tlatlaya and Ayotzinapa massacres, which showed the complicity between the state and organised crime (Briscoe and Keseberg 2019; Díaz-Cayeros et al. 2015). As a result of these incidents and declining disenchantment with the main political parties, Andres Manuel López Obrador (AMLO) and his party the Movement for National Regeneration (MORENA) won the 2018 election based on a platform of social reform and “republican austerity”. AMLO has so far continued the SNA, but has aimed to implement a “square one” (“punto cero”) policy, where corruption crimes would not be investigated retroactively, raising concerns about possible impunity (Morris 2019; Aguilera 2018).

Mexico is a federalised democracy with a president as head of state, as well as a bicameral congress and judiciary. The still valid 1917 constitution established a federal system of government, where the country is divided into 31 states and the Federal District of Mexico City, that now is called Mexico City and has the same level as the other 31 states. Each of these entities has further subdivisions in the form of municipalities or mayorships (Sour 2013). Freedom House considers Mexico to be a partly free democracy (Freedom House 2018), and 69.4% of Mexican respondents to the Latinobarometro survey consider the country to be democracy, though 47.7% of respondents cite major problems (Latinobarometro 2018).

As mentioned, crime is a serious challenge to democratic governance in Mexico. In 2017, Mexico reached its highest number of total intentional homicides (over 29,000) in a year (The Guardian 2018). Moreover, in the 2017-2018 election period 114 candidates and politicians were killed, allegedly by crime bosses in an effort to intimidate public office holders (Beittel 2018 in Kukutschka 2018). According to the Global Peace Index, the cost of violence in the country reached US$249 billion, which is the equivalent to over a fifth of the country’s GDP, in 2017 alone (Institute for Economics and Peace 2018 cited in Kukutschka 2018). In terms of governance, it is estimated that, between 2005 and 2012, 80% of municipalities were under the control of a drug cartel (Orozco 2018a).

Mexico is the largest Spanish-speaking country in the world and the world’s eleventh largest economy (in terms of GDP measured at purchasing power parity), and the economy has evolved from an oil-dependent one up to the early 1990s into a strong manufacturing and trade hub, thanks, partly, to the North American Free Trade Agreement (NAFTA) (OECD 2017b). The proximity to the US market has also given the country a competitive advantage, and 80% of Mexican exports are destined for the US (Villarreal 2017 cited in Kukutschka 2018). Between 1994 and 2017, the proportion of trade as a percentage of GDP increased from 28% to 78%, according to World Bank statistics (World Bank Open Data 2019).

Despite this, poverty and inequality continue to be an issue. Despite a GDP per capita of US$9,698 (World Bank Open Data 2019), approximately 43.6% of the population lives under the poverty line, with 11.3% living in extreme poverty (IBRD 2018). Mexico’s Human Development Index score is 0.774, slightly above the world average (UNDP 2019). Inequality is significant in Mexico, as shown by the country's 2017 Gini Index score of 48.3. The average life expectancy is around 74.9 years (World Bank Open Data 2019).

Extent of corruption

Corruption in Mexico is multifaceted and widespread, constituting the most concerning problem for Mexicans according to a 2017 Pew survey (Meyer and Hinojosa 2018), and the most important electoral issue for Mexican voters according to a July 2018 poll by Parametria (Morris 2019). The estimated cost of corruption as a percentage of the national GDP on annual basis ranges from 2% to as high as 10% (Rodríguez-Sanchez 2018a). In 2010, Transparencia Mexicana estimated that 200 million acts of corruption were undertaken to access essential public services (Soto and Cortez 2015).

Mexico ranks 138 out of 180 countries in the 2018 Corruption Perceptions Index (CPI), with a score of 28, below the global average of 43 and the regional average of 44 (Transparency International 2019b). Finally, the 2018 World Governance Indicators shows that Mexico is in the 18.75 percentile rank for control of corruption, a slight increase from the 16.35 percentile rank held in 2017 (Kaufmann and Kray 2019).

The perceptions of expert participants in the CPI and the control of corruption indicator are also mirrored in the opinions of the general public. According to the results of Transparency International’s 2019 Global Corruption Barometer (GCB) for Latin America and the Caribbean, 44% of respondents in Mexico believed that corruption was on the rise in the country (Transparency International 2019a).

Corruption rates in Mexico may actually be much higher due to low levels of crime reporting. Various studies find that only a very small amount of reported crimes end in successful prosecutions, thus leading to low rates of reporting crime (MEX017). A 2018 report from the National Institute of Statistics and Geography (INEGI) found that only 10.6% of crimes were reported. A 2014 report by the Institute for Federal Elections found 66% of Mexicans do not report electoral crimes, most commonly citing fear of reprisal (Freidenberg and Aparicio 2016). Similarly, Mexicans are very unlikely to report having been solicited a bribe if they ended up paying the bribe, fearing repercussions for participating in the corrupt exchange (Sabet 2013).

Thus, impunity rates in Mexico are high, estimated to be between 96% and 98% (Villagrán 2014). In regard to corruption crimes, between 1998 and 2012, only 1.75% of individuals accused of corruption faced charges in Mexico (Rodríguez-Sanchez 2018b). The 2017 Global Impunity Index grades Mexico as having a high level of impunity, ranking fourth in the world (Le Clercq Ortega and Rodriguez Sanchez Lara 2017). In addition to this, bribery and influence play an important role in attaining lenient sentences from judges or being liberated from pre-trial detention (Bergman et al. 2014). Because of this impunity, lynchings and vigilante paramilitary groups rose during the 2000s where rule of law was absent (Villagrán 2014). Currently, the rule of law index ranks Mexico at 99 out of 126 countries, with a score of 0.45 out of a possible 1 (World Justice Project 2019).

Forms of corruption

Bribery (undue influence)

Soliciting or being solicited for a bribe is not an uncommon situation in Mexico (Oliva 2015; Ugalde 2015). The 2019 GCB finds that 34% of Mexican respondents had paid a bribe in the last 12 months, down from 51% in 2017 (Transparency International 2019a). The 2016 Latinobarometro survey found that 18.9% of Mexican respondents had paid a bribe to a public official (Latinobarometro 2016). According to the 2017 ENCIG 14,635 per 100,000 people reported paying bribes when accessing public services, up 16% from 2015 (INEGI 2018)

According to Transparencia Mexicana, between 2007 and 2010, the average cost of a bribe for Mexican households increased by nearly 20% (from Mex$138 to Mex$165) (2010 cited in IBRD 2018). The same report states that the average Mexican household spends 14% of their income on bribes, while low-income households spent 33% of their income on bribes (Transparencia Mexicana 2010 cited in IBRD 2018).

It should be noted that official statistics on bribery reported to law enforcement are difficult to come by, as police forces at the federal, state and local levels lack coordination between each other and a centralised database of reported and investigated crimes does not exist (Meyer 2014).

A 2016 survey of businesses by the INEGI found that 82.2% of respondents believed that corrupt transactions occur regularly between public servants and businesses (INEGI 2017), with 64.6% of respondents believing speeding up government processes to be the main reason. The same survey shows that 5.6% of business respondents and 13.2% of large businesses experienced corruption first-hand in the past year. According to the World Bank Enterprise Survey, 17.6% of firms operating in Mexico experienced bribery (World Bank 2010).

Procurement and rent-seeking

Currently, 21.2% of public spending in Mexico is destined for public procurement (OECD 2017c). Public procurement in Mexico has historically been associated with the concepts of “moche” and “diezmo” (kickbacks), whereby funding for state public works programmes were guaranteed by bribing federal officials, and public procurement contracts were overpriced so that local officials could get kickbacks or undue rents from contracts (Serra 2016b; Ugalde 2015). Decentralisation in the 1990s saw a significant rise in procurement corruption, as state and local governments gained more fiscal resources and autonomy to increase public procurement, while at the same time decreasing auditing and oversight over said contracts (Sour 2013; Armesto 2015). The MexicoLeaks website estimates that between 2012 and 2017, deviations from public procurement amounted to US$13,526,154 (Salgado 2019).

Public procurement at the federal level is highly concentrated, and companies win contracts through direct adjudication rather than through public bidding, this being the case in 66% of cases (Cerda 2018). Adjudication tends to be due to political connections rather than value: for example, 100 companies received 51% of the procurement budget during the Calderón presidency; six years later, under Peña Nieto’s government, those 100 companies only accounted for 16% of public contracts (Cerda 2018).

Federal procurement is undertaken by purchasing units (unidades de compra) within federal entities, through the electronic CompraNet system, supervised by the Ministry of Administration. The CompraNet system is “a complex, insufficient, incomplete and disarticulated system; rather than a transaction it is a data base” (IMCO 2018 cited in Cerda 2018). The platform provides data dumps of unprocessed data that make following up on public procurement very inaccessible and use by social actors very limited (Cerda 2018; Volosín 2015).

Furthermore, the CompraNet system does not centralise all public procurement, most notably Pemex and the Federal Electricity Commission, which make up significant portions of the federal procurement budget (Martinez and Torres 2019). Also, in 2015, the Mexican government reported to the Organization of American States that 50% of federal public procurement was still carried out in paper format rather than digital or electronic (MESICIC 2016).

A 2016 survey of businesses by the INEGI found that 13.9% of businesses believe companies bribe to win contracts (INEGI 2017). According to one survey, 65% of companies believe that they have “missed an opportunity due to undue competition, where competitors use political influence or handouts” (IBRD 2018). Of those respondents, 57% have resorted to hiring go-betweens (“gestores”) with access to information or political connections to intervene with authorities on their behalf (IBRD 2018). In a slightly older survey, 34.9% of business sector respondents of the World Bank Enterprise Survey stated that they were expected to give a gift to secure a contract (World Bank 2010). Respondents to the 2017 Latinobarometro believe it very probable that bribing a public official will result in winning a public contract (Latinobarometro 2017).

The World Bank estimates that bribes paid out to obtain timely permits and licenses add an additional cost of 4.5% of the total contact being bid for (Lach 2017), while Ugalde (2015) notes that in some states the additional cost may be between 25% and 30% of the base contract.

Recent cases of corruption help to exemplify the prevalence of corruption at the highest levels of government, and the close ties between the business and political elites:

The Casa Blanca (White House) investigation

In November 2014, journalist Carmen Aristegui revealed that the First Lady, Angélica Rivera, had purchased a house worth more than US$7 million dollars in an exclusive Mexico City neighbourhood. The house had been built by Grupo Higa, a construction company that made multi-million-dollar profits thanks to public contracts in the State of Mexico during the tenure of Enrique Peña Nieto as state governor (Aristegui Noticias 2014). Rivera later returned the mansion, and a government investigation found no wrongdoing by Peña Nieto or his wife. The scandal, however, “contributed to Peña Nieto's plummeting approval ratings and the sense that corruption was one of the central failings of his government” (Partlow 2016).

The Odebrecht case

In December 2016, the Brazilian construction company Odebrecht and its petrochemical subsidiary, Braskem, admitted to having paid bribes amounting to US$788 million dollars and agreed to a record-breaking fine of at least US$3.5 billion dollars. The company had paid off politicians, political parties, officials of state-owned enterprises, lawyers, bankers and fixers to secure lucrative contracts in Brazil, Venezuela, Panama, Argentina, Ecuador, Peru and Mexico, among others. Since those revelations, prosecutors across the region have been pressing charges against politicians accused of corruption: almost a third of Brazil's current government ministers are facing investigation, the vice-president of Ecuador was sentenced to six years in jail, and Peru launched investigations against two ex-presidents (BBC News 2017).

In Mexico, the former director of Odebrecht Mexico, Luis de Meneses, directly implicated Emilio Lozoya, the former director of Pemex (Christofaro and Verza 2018). The Mexican government, however, has not brought criminal charges against Odebrecht for allegedly paying US$10 million dollars in bribes to Mexican government officials in exchange for public contracts, and the investigation against Lozoya remains frozen.

Incoming president AMLO has announced the future creation of honesty councils (consejos de honestidad) to provide oversight in 25 priority infrastructure projects. These councils would be composed of local citizens and civil society organisations and provide more localised oversight than existing state citizen participation committees (Hinojosa and Meyer 2019).

Clientelism and patronage

Clientelism in Mexico is considered by most academics to be a product of the PRI’s 70 year control over the Mexican state (Hagene 2015). Clientelism and patronage were common practices to ensure that potential adversaries to the PRI regime were either co-opted with public employment or public contracts, or elected out of office through a machine of vote buying and electoral intimidation (Serra 2016b). It was also common practice to condition social programmes to alleviate poverty in exchange of votes.

Clientelism in Mexico continues to be a serious problem as practices of undue influence on voters to vote for a certain candidate or to not vote at all are common practices for elections at all levels of government (Hagene 2015). Decentralisation in the 1990s increased the amount of resources at the disposal of state and local governments, and relaxed debt ceilings for these governments’ spending led to an increase of clientelist practices in a political environment that saw more competition between parties (Beltrán Ugarte and Castro Cornejo 2019).

Until 2014, elections at the local level were particularly vulnerable to vote buying and voter fraud as local governments controlled electoral management boards, ensuring low levels of oversight and allowing illicit voter controls at polling stations (Cantú 2014; Faughnan et al. 2014). The practice of “fraude hormiga” (“ant fraud”) was common, whereby partisan electoral authorities would permit irregularities at a low scale, slightly tipping the balance in favour of their party, without it alerting state electoral authorities or the media (Cantú 2014).

The 2012 elections were, therefore, widely considered to be a high-point of Mexican clientelism as all major parties mobilised electoral machines to buy votes in key regions (Serra 2016a). Local and state governments pressured public employees to commit acts of proselytism for the government’s party during working hours (Serra 2015). A survey of voters in the 2012 elections found that almost 28.4% of voters were exposed to some form of vote buying (Serra 2016a), and 20% of voters declared that their privacy at the time of voting was violated (Ackerman 2015).

Following this election, civil society pressure led to a major reform in the electoral system, which created new, nationally run electoral management boards at the local level and created new oversight mechanisms (Serra 2016b). In 2014, a battery of reforms were made to the electoral system, increasing electoral crimes and favouring centrally run, locally audited electoral management boards.

Despite these reforms, voter surveys in 2015 showed that voter exposure to vote buying had risen to 51% (Beltrán Ugarte and Castro Cornejo 2019), while the 2019 GCB showed that 50% of Mexican respondents were offered bribes in exchange for votes (Transparency International 2019a). A 2018 report showed that for every peso reported on official campaign expenditure reports, 15 pesos are financed through clientelism and illicit contributions (Global Americans 2018). The same report states that, considering expenditures derived from these illicit sources, campaign expenditures exceed spending limits tenfold.

Embezzlement

Embezzlement is a major corruption issue in many states and municipalities in Mexico. Though there have been recent attempts to increase fiscal oversight over sub-national governments by national audit authorities, state and municipal funds continue to be exposed to misuse and the deviation of public funds (Fonseca 2019). In October 2016, for example, the governor of the Mexican state of Veracruz, Javier Duarte, was forced to resign from his position amid allegations of embezzlement, fraud and deviation of public funds (Villegas 2016). The audits conducted by the federal and local bodies revealed that over US$3.8 billion dollars had disappeared from the public coffers during Duarte’s tenure as governor (Angel 2017). Other governors, such as César Duarte from Chihuahua and Roberto Borge from Quintana Roo, were also accused of embezzlement and illicit enrichment, respectively (Fregoso 2017). In the last six years, at least 22 ex-governors have been investigated for corruption crimes and deviation of public funds. However, corruption networks have not yet been dismantled; and there have not been many sanctions from a judge, except in the case of the governors of Aguascalientes and Veracruz. Asset recovery procedures have not returned all the stolen resources.

Cases of grand corruption in Mexico have not been limited to state or local governments. An investigation by Animal Político, a multi-media outlet, and Mexicans against Corruption and Impunity (Mexicanos Contra la Corrupción y la Impunidad – MCCI), a civil society organisation, revealed a corruption scheme that involved a number of federal ministries, a network of 128 fictitious or irregular companies, and eight public universities. Together, the scheme served to deviate more than US$430 million dollars of public contracts between 2013 and 2014 (Animal Político 2017). Businesses also believe that “public funds are often diverted to companies and individuals due to corruption and perceive favouritism to be widespread among procurement officials” (GAN 2018).

Corruption by sector

While corruption is present in many sectors of the state and the economy, it is in the areas of extractive industries, the energy sector and healthcare where recent literature has placed most emphasis.

Extractive industries

Mining and other extractive industries, though generally overshadowed by the energy and manufacturing sector, are an important part of the Mexican economy. According to the IMF, natural resources account for 15% of total exports and contribute to 36% of total revenues (EITI 2019). Mineral and ore extraction makes up 3% of the country’s GDP (Merino 2015), with more than 1,122 active mining projects (Orozco 2018a) covering 100 million hectares (Cruz 2017).

The 1917 constitution grants exclusive jurisdiction of Mexico’s mineral wealth to the federal government. Concessions and licensing are only adjudicated by the federal government, and this function, though it can be informed by sub-national governments, cannot be delegated (Natural Resource Governance Institute 2017). In the 1990s, the nationalised mining system was liberalised and entirely privatised (Tretrault 2014; Tetreault 2018). Furthermore, a 1992 mining law declared that “the exploration, exploitation and processing of minerals […] will take precedence over whatever other use or productive utilization of the land” (Tretrault 2014), leading to an explosion of mining in areas previously reserved for agriculture or traditional, collectively owned indigenous land (Stoltenborg and Boelens 2016; Cruz 2017). Finally, provisions in Chapter 11 of the NAFTA agreement, allowing companies to sue the government in cases of non-application of the treaty, were abused upon application of sanctions for corruption, environmental or labour violations (Stoltenborg and Boelens 2016).

In the 2017 resource governance index, Mexico is ranked as satisfactory, scoring 60 out of 100 points, ranking 19 out of 89 other resource rich countries (Natural Resource Governance Institute 2017). Mexico has only recently been accepted into the Extractive Industries Transparency Initiative (EITI) after advocacy made by civil society organisations, and has yet to be reviewed to see if it is compliant with EITI norms.

Corruption risks abound around the adjudication of mining concessions: the government gradually opens various areas to exploitation and awards contracts on a “first come, first serve” basis (Natural Resource Governance Institute 2017), rarely opening contracts to public bidding. Information regarding upcoming land concessions is potentially very lucrative, thus bribery and undue influence of public officials is common (Fernando and Sauer 2015). Concession contracts are required to be made public by law, though this is seldom the case (Natural Resource Governance Institute 2017). In 2019, the Fourth Action Plan of Mexico of the Open Government Partnership (OGP) will include a commitment of the Mexican government to make public a beneficial ownership registry of the extractive industries, particularly oil, mining and water concessions.

Oversight and inspections of active mining projects are done regularly, though these tend not to be thorough and usually involve the payment of bribes. Tetreault (2018) notes most reports on mining operations are in “complete disorder, negligence and omission”, with very low rates of sanctions for incomplete or missing information in reports.

The current system of concessions, combined with relatively poor oversight and transparency, has promoted the omission of labour, health and safety standards in mines, as well as a disregard for environmental regulations (Portales and Romero 2016). The proliferation of violence during the drug war has also led to collusion between mining companies and organised crime to suppress discontent or de-incentivise auditing (Stoltenborg and Boelens 2016; Cruz 2017).

In Chiapas, for example, in 2008, a mining concession was granted to a Canadian mining company with certain environmental and social conditions that specified the provision of financial and infrastructural support to local communities in an attempt to ensure they benefitted from the project. The company proceeded to renege on its obligations and went further, expanding its operations beyond its concession, harming the local environment and communities in the process. As civil society organisations came forward to denounce the violations, the company allegedly pressured the weak municipal state apparatus to jail civil society leaders (Cruz 2017). The brutal murder of one of these leaders led to an investigation by the state, overseen by the Department Foreign Affairs and International Trade Canada, which allegedly uncovered various cases of corruption and collusion between the company, corrupt governments and local crime groups (Cruz 2017).

Mexico has also seen the rise of illicit mining operations owned and operated by drug cartels as money laundering fronts (Tretrault 2014). In the states of Michoacán, Jalisco and Colima, drug cartels actively mine minerals illegally, often bribing officials to guarantee export of these goods, as well as employing violence to silence watchdogs and critics (Tretrault 2014).

Health service delivery

In terms of health provision, Mexico faces some challenges from corruption and mismanagement. The healthcare system is divided into public and private healthcare providers, though many public healthcare services were privatised in the 1990s (Laurell 2015). Quality of healthcare and prevalence of bribery depends on the state in question, with more urbanised states having higher rates of corruption in healthcare (Pinzón Flores et al. 2014).

Mexico faces a particular challenge in overpricing of medical supplies and pharmaceuticals. Before 2008, medical purchases were made between healthcare institutions and pharmaceutical companies, leading to high levels of price disparity among institutions (BID 2016; Pinzón Flores et al. 2014). Furthermore, corruption was a common practice between sellers and healthcare providers, integrating “moches” to favour some products over others (OECD 2013 cited in BID 2016). Since 2008, the federal government has acted as the sole buyer of medical supplies and pharmaceuticals and has drastically improved overpricing from pre-2008 levels. It should be noted, however, that problems with public procurement of pharmaceuticals persist as pharmaceutical purchases have very little oversight and transparency, and tend to suffer from external political pressures to favour some companies over others (BID 2016).

Though the illicit trade of legal narcotics is not a significant portion of Mexico’s drug trade, mismanagement and theft of pharmaceuticals by healthcare professionals and unnecessary purchasing of pharmaceuticals created a significant illicit market relative to other countries in the region (BID 2016).

According to the 2019 GCB, 16% of Mexican respondents stated they had paid a bribe for medical services (Transparency International 2019a), a statistic echoed by a 2019 Latinobarometro survey which also found 16% of Mexican respondents paid bribes to access healthcare (Latinobarometro 2019). The 2017 ENCIG survey found that only 0.5% of respondents paid bribes to access urgent medical care, and 0.2% of respondents paid bribes to access programmed medical care (INEGI 2018).

Corruption in the energy sector

Until the mid-2000s, oil-related activities accounted for about 13% of GDP. Over the last decade, however, declining oil extraction from Pemex, the national oil company, had an important effect on the oil-GDP contribution, which fell to about 8% in 2016 (OECD 2017b). Moreover, prior to the 2013/2014 constitutional reforms, Pemex had a monopoly on all hydrocarbon activity in the country. The reforms have opened this sector, allowing domestic and international private firms to bid on hydrocarbon projects and partner with Pemex, creating significant new investment opportunities for Mexican and foreign investors in upstream, midstream and downstream business lines (US Department of State 2018). The energy sector in general is dominated by Pemex and by the Federal Electricity Commission (Comisión Federal de Electricidad, CFE), the national regulator.

As is the case with mining, hydrocarbons are subject to federal jurisdiction and concessions are adjudicated by the federal government (Natural Resource Governance Institute 2017). Furthermore, article 25 of the constitution establishes that energy exploitation and planning be done in a transparent manner (Fierro 2017). Yet secondary laws are unclear about the amount, quality and timeliness of information that must be disclosed (Fierro 2017).

The OECD considers the energy sector to be the sector of the Mexican economy most prone to corruption (Cabello and Santos 2016). Both Pemex and the CFE made Fortune’s 2015 list of top 10 money losers in 2015, partially due to value lost through fraud and corruption (Vietor and Thomason 2017). Before the 2013 reform of the energy sector, corruption was cited as an important factor in the lack of production of oil and the high inefficiency in the energy sector. Contracts were overpriced to ensure managers could extract kickbacks, embezzlement was common practice and profit skimming from commercial departments were among the documented practices (Wood 2013). Fraud and hydrocarbon and electricity theft continue to be serious problems within the energy sector (Fierro 2017, Vietor and Thomason 2017).

Public procurement in the energy sector is the most important issue involving corruption. Due to its historical importance to the Mexican economy, Pemex operated under a different procurement regime than other state-owned enterprises (Ackerman 2013). As mentioned previously, neither Pemex nor the CFE use the CompraNet platform to manage procurement, but rather their own independent electronic platforms. Both these platforms have shown important limitations to control and oversight. The Pemex platform is difficult to access, and interested users must register as service providers to access information regarding current procurement opportunities; the CFE platform is much closer to the standard of CompraNet, but lacks any information on public contracts after 2015 (Martinez and Torres 2019). The lack of contract transparency and the wide use of post-adjudication modifications to contracts make citizen oversight of the energy sector extremely difficult (Cabello and Santos 2016).

Martinez and Torres (2019) analysed purchasing units within the federal government to see which were most prone to corruption, considering transparency of public contracting, degree of competition for contracts and anomalies found in bidding documents. They found that 91 of the 500 procuring agencies most at risk of corruption were in the CFE (Martinez and Torres 2019, Cerda 2018). This is troubling, as the CFE accounts for 19% of the federal budget for procurement.

The 2013 reforms have made some advances in detecting corruption in Pemex, primarily due to the pressure of new investors in the energy sector. New audit procedures were established and regular anti-corruption reports must be produced and related to judicial authorities (Fierro 2017). New internal complaint mechanisms have constituted the most important source of corruption complaints and have led to numerous anti-corruption efforts (Fierro 2017). An increased number of contracts have been adjudicated through public bidding, resulting in a noticeable drop in overpricing, leading to a general drop of procurement expenditures by 20% (Vietor and Thomason 2017). A 2014 hydrocarbons law also increased sanctions for corruption crimes related to the energy sector (Westenberg and Sayne 2018).

There is little information in the literature on corruption in other areas of energy production. The hydroelectric sector has garnered publicity in recent years due to controversial projects related to hydroelectric dams. Concessions for hydroelectric dams and related projects is generally under the jurisdiction of state governments, which provide important opportunities for corruption through influence trafficking and bribery.

Some cases of corruption have come to light in recent years, including the hydroelectric project in the state of Zacatecas, which was approved by the state government under unclear and rushed terms, and has put the state’s water table at risk, endangering agricultural industries (Tetreault and McCulligh 2018). The case also involved the submission of fraudulent documents by company and public officials that showed erroneous environmental effects of the project.

Legal and institutional framework

Overview and background

Attempts to counter corruption in Mexico have not had much documented success, according to the available literature. Although successive governments since the transition to multi-party democracy have used the counter corruption measures as a rhetorical tool during elections, few steps have been made to address corruption. Nevertheless, in 2019, 61% of Mexican respondents of the GCB considered that the government was doing a good job countering corruption (Transparency International 2019a).

Efforts began in 2012 during Enrique Peña Nieto’s presidency, who included an anti-corruption dimension into the Pacto por México. The product of two years of policy formulation with the contribution of civil society organisations was the national anti-corruption system (Sistema Nacional Anticorrupción, SNA) (Transparencia Mexicana, 2016). The SNA is the result of the participation and commitment of the Mexican state, organised civil society and the country’s academic institutions in the attempts to counter corruption. The SNA is an instance of coordination between authorities at the three levels of government and civil society that unite efforts to prevent, detect and punish acts of corruption and improve the control and exercise of public resources. The General Law of the National Anti-Corruption System (Ley General del Sistema Nacional Anticorrupción) was approved in 2015, with reglementary laws being passed in 2016, to be fully functional in 2017. For this law to be applicable at the state level, it required approval of all 31 states and the federal district to fully integrate all sub-national governments.

The SNA establishes a framework for cooperation between 96 entities at the federal, state and municipal levels to “establish principles, general baselines, public policies and procedures for the coordination between authorities at all levels of government charged with the prevention, detection and sanction of administrative faults and corruption crimes, as well as the audit and control of public resources; all this in order to establish, articulate and evaluate policies on these topics”. (Sistema Nacional Anticorrupción 2019a).

The format of the SNA is meant to achieve three objectives, as stated in the original legislative project (Merino 2015): first, it should guarantee a system of checks and balances between anti-corruption bodies of the three branches of government, allowing complaints ignored by one branch to be addressed by the others; second, the coordinating committee should be the most important formulator in the country based on inputs from the seven main entities of the SNA; third, it should create an integrated institutional intelligence network.

The committee is composed as follows. A representative of the citizen participation committee is the chair and the remaining members include the head of the Ministry of Public Administration (SFP), the head of the Superior Audit of the Federation (ASF), the head of the Special Prosecutor's Office for Combating Corruption, a representative of the federal judiciary council the president of the National Institute of Transparency, Access to Information and Protection of Personal Data (INAI), and the president of the Federal Court of Administrative Justice.

The SNA can be divided into two sub-systems: the transparency and oversight. These are meant to work in tandem, supervised and monitored by a citizen participation committee (CPC).

The sub-system for transparency aims to increase the available information about anti-corruption investigations, audit documents and general governance information, guaranteeing correct adherence to transparency and access to information standards by participating entities (Gutiérrez Salazar 2017). It is comprised of the ASF, the INAI and the CPC. The entities within this sub-system operate and aim to improve the functions of the national digital platform. This sub-system is composed of the INAI, the CPC and the SFP.

The sub-system for oversight is the investigative and prosecutorial arm of the SNA, charged with sanctioning administrative deviance, misdemeanours and crimes, as well as general corruption crimes. The sub-system includes the SFP, the ASF, the Special Prosecutor for Combating Corruption, the Federal Court of Administrative Justice (TSJA) and the judiciary committee.

To prosecute corruption, the SNA establishes a framework of checks and balances to investigate corruption and relay most serious crimes and misdemeanours to the judicial system. The ASF and the SFP, serve as primary detection agencies, undertaking audits and controls of government bodies and receiving corruption complaints through official complaint channels (González 2018).

If these entities detect corruption crimes or serious administrative faults, they are charged with investigating and preparing cases for prosecution, which are then presented to the TSJA (González 2018). If the misdemeanours are minor, the SFP and the ASF can apply a set of defined sanctions (such as suspension or rehabilitation training) for offenders (González 2018). Both the ASF and SFP have adopted the standard model of internal control (Modelo Estándar de Control Interno, or MECI) to establish common auditing practices and information sharing practices to avoid double imputation of sanctions for the same misdemeanour (OECD 2017c).

It is important to note that, at the state level, application of the SNA – the local anti-corruption systems – has not been uniform among states. In January 2019, only the state of Jalisco was considered to be fully compliant and adhered to the SNA (Monsivais-Carrillo 2019). As of mid-2019, four states had yet to pass a state level SNA, and three states that have passed SNA laws had failed to make any key appointments (Hinojosa and Meyer 2019). The federal CPC has launched legal action against various state congresses that have failed to assign resources to their states’ SNAs: in 2018 only 50% of state budgets included funding for SNA commitments (Hinojosa and Meyer 2019).

International conventions

Mexico has ratified the United Nations Convention against Corruption (UNCAC) as well as the Inter-American Convention to Combat Corruption. It is also a signatory to the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions.

Mexico has been a member of EITI since 2017 and the Open Government Partnership since 2011, currently developing its fourth action plan.

Domestic legal framework

Criminalisation of corruption

Articles 15 to 22 of the federal penal code criminalise a number of corruption related offences, such as active and passive bribery, extortion, abuse of office, money laundering, bribery of foreign public officials (OECD 2018a) and facilitation payments. Similarly, the federal public servants’ responsibilities law prohibits public officials from requesting or accepting goods or services, either free or at a price less than market value, from individuals or corporations whose professional interests conflict with the official duties of the public servant (Cuevas 2019, Zalpa et al. 2014).

In addition to criminalising specific corruption offences, Mexico also has specific laws dealing with money laundering (the anti-money laundering law), which restrict operations in vulnerable activities and provide criminal sanctions and administrative fines for failure to comply (GAN 2018). The Tax Justice Network notes that despite these laws, Mexico is only 49% compliant with the Financial Action Task Force standards it has subscribed to (Tax Justice Network 2018). This is echoed by the OECD, which claims that current anti-money laundering laws do not do enough to detect and prosecute illicit financial flows (OECD 2018a).

Two SNA laws also expanded the scope of corruption offences that the federal government can prosecute: the federal law on anti-corruption in public procurement (Ley Federal Anticorrupción En Contrataciones Públicas) passed in 2012 incorporates specific corruption crimes related to public procurement and procedures to investigate and sanction such crimes (Rivera 2016). The general law of administrative responsibilities (Ley General De Responsabilidades Administrativas) includes a catalogue of administrative misdemeanours and sets out administrative disciplinary procedures for misconduct (Campos 2017). The law also extends responsibility for administrative misdemeanours to legal and physical persons outside the public sector. A broad coalition from a diverse group of citizens and civil society organisations developed this legislative proposal commonly known as Ley 3de3. The document defined different types of conduct that should be deemed acts of corruption and established firm punishments for them. These range from removal from public office to compensatory and punitive damages, and permanent restriction from holding any public sector position. Ley 3de3 also demanded that all members of congress and government officials, including the president, make three declarations public: assets, potential conflicts of interest and taxes.

The SNA has attempted to approximate state penal codes to the federal penal code to strengthen the prosecution against corruption. Since corruption is not a federal crime, however, its criminalisation is not uniformly legislated in the country (Olvera and Galindo Rodriguez 2019).Cuevas (2019) lists a number concerns regarding the criminalisation of corruption crimes as compared to those recognised at the federal level, including:

abuse of authority or entrusted power: three states lack the legislation for this crime
undue use of public functions or attributions: 25 states lack legislation
accepting bribes: five states lack legislation
solicitation of bribes: two states lack legislation
influence trafficking: 12 states lack legislation
illicit enrichment: four states lack legislation

It should be noted that a study by Ferreyra (2018) finds that, while corruption crimes are generally treated as serious offences by judges and magistrates, there is a notable lack of sanctioning of nepotism and influence peddling. This has led to a general normalisation of nepotism (colloquially referred to as “cautismo”) as a common phenomenon, rather than a serious crime (Zalpa et al. 2014).

Transparency and access to information

Article 6 of the Mexican constitution states that “the right to information will be guaranteed by the state”. The country’s general act of transparency and access to public information, which replaced the previous law on transparency and access to information in 2016, has been recognised as one of the most progressive in the world. This law was designed to close some of the loopholes from the previous regulatory framework, and it now requires state authorities in all branches, autonomous organisations, trade unions and any other entities dealing with public funds to make all information generated available to the public (Loredo 2016). The law also prohibits information related to corruption from being withheld from the general public (Garcia Garcia 2016).

Mexico is considered to have one of the most comprehensive access to information laws in the world, behind only Afghanistan in the Global Right to Information Index with a score of 136 (Centre for Law and Democracy 2018). The quality of the law does not stray far from the quality of its implementation. From 2003 to 2015, an annual 103,830 access to information requests were made to the federal government (Meneses et al. 2017), in 2016, the INAI reports having answered upwards of 400,000 access to information requests, with an answer rate of 71% (INEGI and INAI 2017). Reviewing a sample from 2007 to 2015, a study by Lagunes and Pocasangre (2019) shows that 74% to 76% of access to information requests were answered in a timely manner by the federal government. The study notes that the general quality and timeliness of the answers did not vary when considering access to information requests from politically exposed persons.

However, more transparency does not mean that less corruption. Studies from Transparencia Mexicana have pointed out that there is not a positive correlation between transparency and corruption (Bohórquez et al. 2016).

Mexico ranks among the top five OECD countries with regard to the definition and implementation of open government data policies and initiatives. Mexico’s ranking results from “the high-level political commitment shown by the Mexican government to spur the digital transformation of the public sector” (OECD 2018b).

Successive governments have pioneered several open government projects that involved other branches of government, sub-national governments and independent state institutions, creating the Open Mexico Network and the Alliance for an Open Mexican Parliament in 2014 (OECD 2018b; Martinez and Torres 2019).

As for public procurement transparency, recent attempts have been made to improve accessibility to contracting data for citizens. On the basis of the open contracting data standard, the federal government, with the support of civil society organisations such as Transparencia Mexicana, developed the open contracting platform, which aims to make information about public procurement easier to access and process (Secretaría de la Función Pública and Secretaría de Hacienda y Crédito Público 2019). While the platform is still in its beta version, and while the government stresses a caveat that the platform includes procurement from entities who reported data, the platform has reported on more than 400,000 processes since 2017, involving more than 45,000 contractors (Secretaría de la Función Pública and Secretaría de Hacienda y Crédito Público 2019).

Mexico performs well in the Open Budget Index, in relation to budget transparency. Mexico scores 79 out of 100, far beyond the global and regional average (Open Budget Partnership 2017). As part of the reforms to the ASF and the SFP, these entities, as well as the Special Prosecutor in Combating Corruption, are required to present reports during the period of budget formulation and deliberation to inform legislators about possible corruption risks or past incongruencies with the budget (Ackerman 2013).

Finally, the judicial system, specifically the supreme court, under pressure from civil society groups, has begun a gradual opening of information relating to its activities. It has solicited the senate that judge selection criteria be made public, and has decreed that its hearings will be public and televised (Garcia Garcia 2016).

Despite high performance at the federal level, state and municipal governments do not perform at such a high level in terms of access to information (Garcia Garcia 2016). According to the 2015 IDAIM Index, only the federal government and one state had reached the optimal level of transparency established, while 14 states had reached only moderate performance, and 17 were rated deficient (IBRD 2018).

Furthermore, while transparency of public entities has been a major focus of successive governments, disclosure of information related to the private sector – particularly in bank secrecy, beneficial ownership and corporate tax – remains very low, despite Mexico being an important destination for tax evasion or money laundering (Binder 2019, Tax Justice Network 2018).

Political party and campaign financing

Electoral funding in Mexico is strictly regulated. The National Electoral Institute (INE) establishes a maximum spending limit that all candidates, parties and coalitions must adhere to. Most electoral expenditures stem from Mexico’s public electoral financing regime. While parties can receive limited funds from trade unions, corporate donations are strictly prohibited (Torres-Spelliscy 2015). Funding from foreign sources is likewise prohibited. Private sector donations are prohibited for independent candidates. Eligible voters can donate to political parties and campaign in cash or in kind, but are subject to spending limits (Murray and Eschenbacher 2018).

The 2014 electoral reform law modified the Federal Electoral Institute (IFE) to a National Electoral Institute (Instituto Nacional Electoral, INE). Public financing of elections was centralised and homologised so that all states’ financing regimes operated under the same rules and followed similar audit time-frames. The reform also included changes to electoral expenditure reporting, which have to be reported instantly via a digital platform that allows the INE to follow expenditures in real time (MEX 107).

Vote buying and impeding someone from voting are considered electoral crimes (FEPADE 2019). The 2014 reform added new electoral crimes and harsher sanctions for existing crimes (Serra 2016a) including promising social assistance plans in exchange for votes, public officials obligating subordinates to participate in marches or other political activities, promising money or gifts in exchange for abstaining from voting, and “electoral tourism”, where voters are instigated to vote in districts where they do not reside.

Conflicts of interest and asset declaration

Though conflict of interest issues are not well defined in the Mexican legal framework (US Department of State 2018), there have been some advances in regulating conflicts of interests in the public sector since the establishment of the SNA.

Ley 3de3 established a regime of sworn affidavits from public servants and electoral candidates, whereby they had to submit three declarations: a tax compliance declaration, an asset declaration form and a conflict of interest declaration (https://www.3de3.mx/acerca_de). These three declarations were to be made public and accessible to the general public (https://coparmex.org.mx/ley-3-de-3-iniciativa-ciudadana-que-espera-ser-cumplida/).

The proposed law was incorporated in the text of the general law of administrative responsibilities. A posterior law, the organic law for the federal public administration (Ley Orgánica De La Administración Pública Federal) established the SFP as the enforcement body for asset and interest declarations. In 2017, modifications were made to the law to increase the amount of civil servants required to present declarations, raising the number to around 280,000 civil servants (Hinojosa and Meyer 2019).

While asset and conflict of interest declarations are a step forward for Mexico, there is no comprehensive plan to audit and control these declarations to identify red flags for corruption (OECD 2017c; Grupo de Examen de la Aplicación CNUCC 2018). The implementation of the asset and conflict of interest declaration regime has been slow. The original declaration form proposed by the initiative was rejected and the coordinating committee of the SNA had yet to approve a replacement form by June 2018 (Coparmex 2018). Compliance with the Ley 3de3 has remained limited. According to Ley 3de3 website, only 125 of 628 members of congress have submitted asset declarations, along with 26 of 32 state governors and 69 of 2,457 mayors (IMCO and Transparencia Mexicana 2019). In total, only 925 public officials and two candidates have submitted asset declarations. The final templates for the publication of these declarations were released in September 2019.

Lobbying

Conflict of interest rules for legislators, as well as lobbying regulation is still very unclear as special interest groups and lobbyists operate more or less unrestricted in congress in major regulatory issues (Ackerman 2013). Both chambers of congress have definitions and regulations on lobbying in their respective chambers’ rules and regulations, and both chambers lack proper enforcement of these regulations (Córdova 2018).

The chamber of deputies has a lobby register and requires registration of lobbying firms and individuals for each legislative period to be made public upon consultation. Legislators are prohibited from accepting gifts or payments and of having lobbyists in their employ.

The senate does not have a lobby register but requires legislators to report lobby activity to the parliamentary secretary. Senators are prohibited from accepting gifts or payments, under pain of sanction.

Both chambers define lobbying and conflicts of interests differently, thus exact numbers of lobbyists are hard to quantify (Córdova 2018). The chamber of deputies registered 258 lobbyists in 2012 (AALEP 2014). One study of Mexican congress members found that 25% of them had ties to special interest groups or lobbying firms (Delgadillo and Salinas 2019). The National Association of Professional Lobbyists (PROCAB) does not disclose its individual members but associates 23 independent lobbying firms (AALEP 2014). One of the country’s OGP commitments is to establish an open parliament system, and will explore means to make lobbying more transparent. This has not been accomplished yet.

Whistleblowing

Despite a legal obligation of citizens and public employees to denounce crime and corruption, whistleblower protection remains underdeveloped in the country (Medel-Ramírez 2016). Only 10.1% of respondents of the 2016 Latinobarometro survey who reported corruption said they faced reprisal afterwards (Latinobarometro 2016).

The general law of administrative responsibilities establishes a basic whistleblowing framework in the country, applying to all levels of government, including state-owned enterprises (OECD 2017c). However, there are few protections against reprisals if the identity of the whistleblower is eventually disclosed. The law does not explicitly prohibit the dismissal of whistleblowers without a valid cause, does not establish sanctions or reparations for reprisals applied to whistleblowers (OECD 2017c, OECD 2017a). The law is vague on reparations, and puts the onus on the whistleblower to solicit courts for “reasonable reparations” (Orozco 2018b). It should be noted that various laws exist that establish witness protection in the framework of criminal proceedings, but protection for whistleblowers of corruption is not specifically mentioned.

The federal government provides various corruption complaint mechanisms for citizens to report corruption (OECD 2018a; Orozco 2018b). The Centre for Complaint and Citizen Attention (CEDAC) of the Attorney General of the Republic allows citizens to make reports and complaints about any criminal offence, in writing, by phone, e‑mail or through social network channels; the Citizen Support System, known as VISITEL, provides a channel for reports about suspicious administrative or criminal violations committed by public officials in the performance of their duties, where reports can be made anonymously by mail or by phone; the Comprehensive System of Citizen Complaints (SIDEC) is available through the SFP (OECD 2018a).

The most significant changes that the SNA produces in terms of whistleblowing is at the state level. As will be addressed below, the SNA increases the jurisdiction of the ASF to include all entities, public or private (including state governments), that manage federal funds. Because of the expansion of scope of duties, the ASF can now receive corruption complaints for state related corruption. The SNA also introduces new complaint channels through state level adherence laws to the federal SNA. In some states these constitute the first instances of corruption and administrative misdemeanour complaint mechanisms in the state (González 2018; Ledezma et al. 2019).

Recently, the federal government launched an Integrated System of Citizen Reports (SIDEC). However, without guarantees of protection to those who denounce corruption, it seems unlikely that this will be effective.

Institutional framework

As mentioned, the SNA has aimed to restructure the Mexican anti-corruption institutional framework to facilitate the coordination of prevention, detection and prosecution of corruption, at the national, state and municipal levels.

The centrepiece of the SNA is a coordinating committee integrated by representatives of the SFP, the TSJA, the ASF, the Office of the Special Prosecutor on Corruption, the National Institute for Access to Information (INAI), and a representative of the judicial council. The committee is presided over by the president of the citizen participation committee. The goal of the coordinating committee is to facilitate exchanges between actors and streamline these interactions to increase the quality of information shared among them. The coordination committee is also the policy development engine of the SNA as it is responsible for developing rules and regulations pertaining to transparency or integrity initiatives, including the development of asset declaration forms, codes of ethics and policy recommendations to congress.

The SNA created two networks to coordinate its work, specifically, auditing and anti-corruption prosecution, in all 32 states. The first, the Rectorate Committee of the National Audit System (Comité Rector del Sistema Nacional de Fiscalización), gathers the ASF, the SFP and the supreme audit institutions of each state. The committee is meant to promote information sharing and provide training and technical support to meet with national and international standards (Sistema Nacional Anticorrupción 2019b; Ruanova et al. 2018).

The second network is the 32 local anti-corruption systems (32 Sistemas Locales Anticorrupción), meant to create a forum and a mechanism for the exchange of information between the Special Prosecutor for Combatting Corruption and state anti-corruption prosecutors.

Secretaría de la Función Pública (Ministry of Public Administration)

In 1982, President Miguel de la Madrid created the general comptroller’s office, which in 2003, under Vicente Fox, became the Ministry of Public Administration (Secretaría de la Función Pública, SFP) and has since served as the top anti-corruption body of the executive branch. The SFP remains under the control of the presidency, thus determining its authorities, composition and budget, though since the passage of the Organic Law for the Federal Public Administration (Ley Orgánica de la Adminstración Pública Federal), appointees must be approved by the senate.

The SFP is the federal entity responsible for “developing and overseeing policies, standards and tools on internal control, including risk management and internal audit functions in the federal administration” (OECD 2017c). The SFP operates through specialised units charged with “preventing, detecting, sanctioning and eradicating corrupt practices within a public entity” (Secretaría de la Función Pública 2019; Nava Campos 2018).

The scope of the SFP’s competencies range from public employment and resource management to public procurement and enforcing the internal administrative disciplinary regime. The SNA further added competencies to the SFP, including the implementation of codes of conduct and managing the asset and interest declaration regime.

The SNA strategically integrates the SFP into both the transparency and the oversight subsystems: on the one hand, it develops and relays vital information related to the public administration to transparency and information sharing entities, while also applying transparency policies within the federal bureaucracy; meanwhile, it also plays a key role in relaying serious administrative misdemeanours and suspected cases of corruption to the TSJA, and applies its own sanctions for less serious administrative faults.

The efficacy of the SFP to fight corruption has been criticised by some scholars. Larreguy et al. (2014) notes that between December 2006 and July 2012, the Ministry of Public Function only recovered US$2 million through fines, sanctioned 9,000 public employees for serious misdemeanours, and incarcerated 100 officials. In 2017, the head of the SFP decided to absolve Peña Nieto and his family from all fault in the Casa Blanca case, calling into question de effectiveness of the institution to act against the president (Cortez-Morales 2017)

Fiscalía Especializada en Combate a la Corrupción (Special Prosecutor's Office for Combating Corruption)

The Organic Law of the Attorney General’s Office (Ley Orgánica de la Procuraduría General de la República) creates the position of a specialised anti-corruption prosecutor within the independent National Prosecutor’s Office to deal specifically with corruption crimes categorised in the federal penal code. The law further requires all states to have a similar prosecutor for corruption crimes.

The goal of the special prosecutor is, first, to approach corruption from a specialised, technical standpoint, applying knowledge and technical expertise developed through the SNA to cases of corruption that required a nuance not found in regular prosecutor’s office (González 2018). It conducts investigations and provides technical assistance to ongoing corruption investigations by general prosecutors. Second, the special prosecutor is meant to reduce political influence over investigations into government malfeasance.

Specialised prosecutors are selected by congress and state legislatures for their respective jurisdictions (OECD 2017c). The office has administrative autonomy, yet is dependent on National Prosecutor’s Office for its budget. While the National Prosecutor’s Office has constitutional guarantees regarding its independence and budget, and has special legal and patrimonial status, the special office’s budgetary dependence is a potential concern. For example, in 2015, the National Prosecutor’s Office spent three times more on “social communication” than on the special office for corruption crimes (González 2018).

The first special prosecutor was chosen in early 2019 and began to operate shortly after, albeit with notable backlog of two years of inaction (Hinojosa and Meyer 2019)

Tribunal Federal de Justicia Administrativa (Federal Court of Administrative Justice, TFJA)

The TFJA is responsible for hearing cases related to serious breaches of the law of administrative responsibilities by public officials and private persons, determined by either the Ministry of Public Administration or the ASF. The court is also responsible for determining the appropriate sanctions and remedies for acts of corruption and serious administrative faults that incur additional cost to the state or affect state patrimony (González 2018).

Despite being an autonomous body, the court is not fully independent from the executive since the president determines the human, financial and material resources allocated (González 2018)

Auditoría Superior de la Federación (supreme audit institution)

The superior audit institution (ASF) is the specialised technical body of the lower chamber of congress with the authority to oversee the use of federal public resources in the three branches of government, the autonomous bodies, the federal states and municipalities. The ASF responds to the Commission of Vigilance of the ASF (Comisión de Vigilancia de la ASF) within the chamber of deputies; it oversees ASF activities and issues specific audit tasks based on congressional requests. The commission has a special unit of evaluation and control that guarantees the quality of fiscal documents (Escudero 2018).

As part of the SNA, the Law of Auditing and Accountability (Ley de Fiscalización y Rendición de Cuentas de la Federación) extends the remit of the ASF, allowing for real-time audits and oversight over transfers to sub-national governments. The current regime allows the ASF to audit any government entity, as well as government contractors and private sector partners, that collect, manage or spend public resources (Chong et al. 2014). The law expands the range of administrative misdemeanours which the ASF can investigate. It also changes internal auditing procedures to be able to undertake audits within 15 business days, and to present completed audits before the start of the next fiscal cycle (Escudero 2018).

The ASF can establish internal directives for state and municipal audit institutions to facilitate the exchange of information or ensure uniformity in audit reporting mechanisms. It can also establish fines for entities that refuse to relay audit information in a timely manner (Rosales and Partida 2018).

Corruption complaints can be made to the ASF through the chamber of deputies, to the Commission of Vigilance of the ASF or through complaint channels operated by the ASF (Rosales and Partida 2018).

The ASF’s biggest impediment to being an effective anti-corruption body is its lack of capacity to sanction corruption crimes. Unlike the SFP, which can relay sanctions on minor misdemeanours, the ASF can only make recommendations which are then relayed to the TSJA (González 2018; Escudero 2018). Concerns about inaction regarding these recommendations are well founded: less than 2% of cases of deviation of public funds recommended for judicial action led to a conviction between 1998 and 2012, despite the fact that the number of cases referred by the auditor to the federal prosecutor’s office rose from two to 134 a year in that time (IBRD 2018).

Furthermore, there is also concern that a dead-locked Commission of Vigilance may also lead to inactivity or hindrance of effective corruption control by the ASF, especially considering that the ASF depends on a yearly renewal of its budget by the commission (González 2018; Gudiño 2018). This is not simply a theoretical concern as the commission has failed to approve the ASF budget several times (Escudero 2018). The ASF does not currently lack resources, nor autonomy to undertake audits as it sees fit, but notes that existing controls and reviews of audits by existing federal entities are ineffective.

Instituto Nacional de Transparencia, Acceso a la Información y Protección de Datos Personales (National Institute for Transparency, Access to Information and Personal Data Protection, INAI)

INAI is an autonomous body responsible for guaranteeing the right of access to public government information, protecting personal data in the hands of the federal government and settling disputes over refusals by government agencies to grant public access to information. The INAI’s highest governing body is the plenary, which is composed of seven commissioners appointed by the senate.

INAI is also coordinates transparency committees and transparency units (Comités y Unidades de Transparencia), which are officers within each entity under the jurisdiction of the access to information law, which report on access to information practices and assist their respective entities to improve the timeliness and quality of their responses.

The INAI is also responsible for the national transparency platform.

Comité de Participación Ciudadana (citizen participation committee, CPC)

One of the most important innovations of the SNA is the CPC. This committee is formed by five civil society representatives and academics “renowned for their expertise and contributions to the field of anti-corruption, transparency and/or accountability in Mexico” (OECD 2017c).

The members of the committee are appointed by a specialised selection committee named by the senate, and its goal is to build a bridge between the government and civil society by creating a registry of experts and channelling their research and recommendations into the system. The president of the committee is likewise the president of the coordinating committee, placing the most important coordinating position of the SNA in the hands of a member of civil society or academia.

The committee has its own annual work plan, which may include research, investigations and projects for improving the digital platform or reporting on corruption by the public (OECD 2017c). The committee is the primary oversight mechanism of the SNA and acts as an ombudsman for the citizenry in instances where entities within the SNA are not complying with their own directives or when external authorities are hindering the actions of SNA entities (Rosales and Partida 2018; Rocha 2019).

Furthermore, the CPC has the power to initiate legal actions (amparos) against government entities, who through their action or inaction, hinder the activities or integrity of SNA entities. For example, in 2018, the CPC initiated a legal action against the senate and the permanent commission of the Mexican congress for their failure to appoint 18 magistrates to the TSJA, hindering its capacity to operate (Hinojosa and Meyer 2019). The legal action was deemed valid by the courts, and the senate ordered the approval of candidates for the vacant positions (Monsivais-Carrillo 2019).

State SNA systems also have CPC’s, composed of state and local civil society organisations (CSOs). The creation and assigning of these state CPCs were undertaken quickly relative to the implementation of other state SNA bodies. By September 2018, almost all states had functioning and operational CPCs (Ledezma et al. 2019).

One major issue that the CPC will face, according to Hill Mayoral (2017) is the lack of resources to undertake the activities and functions it has set out for itself: they note that the executive secretary of the CPC, the administrative branch of the committee, has already noted an important backlog of duties, partly due to the enormous role of coordinating the SNA, but also due to delays in appointments to the CPC, as was the case of the technical secretary in 2018 (Rocha 2019).

Consejo de la Judicatura Federal (federal judicial council)

The federal judicial council is responsible for carrying out investigations and establishing sanctions or disciplinary proceedings for judicial officials. It is thus mandated with enforcing the standards of conduct established in the National Law on Public Security (Ley General del Sistema Nacional de Seguridad Pública) among police forces and the code military justice for army officials (OECD 2017c).

In April 2019, the new government presented an initiative to add an “anti-corruption chamber” made up of five new justices to the supreme court, raising the number of supreme court justices from 11 to 16. This not only raised concerns about a possible attempt to stack the supreme court, but also that it would threaten the autonomy of the Federal Judicial Council (Hinojosa and Meyer 2019).

Secretaría Ejecutiva del Sistema Nacional Anticorrupción (Executive Secretariat of the National Anti-corruption System, SESNA)

SESNA is the only technical support organism dedicated to the national anti-corruption system with operational autonomy which is part of the federal public administration. Its budget is determined by the Ministry of Finance and its operation is under the supervision of an internal control body that depends on the Ministry of Public Administration. Their work is to support the coordinator committee to improve and implement their decisions and to coordinate the NAS. They propose public policies, design evaluation methodologies and administer the national digital platform (https://plataformadigitalnacional.org/).

Unidad de Inteligencia Financiera (financial intelligence unit, UIF)

Though not formally incorporated into the structure of the SNA, the UIF, is crucial within the institutional framework to fight corruption in Mexico. Formally within the Ministry of Finance and Public Credit, the UIF is the primary detection and investigative body for money laundering, illicit financial flows and other financial crimes. The UIF is the entity responsible for coordinating with foreign financial intelligence units and with internal audit institutions.

Electoral authorities

Electoral management, and the prevention and investigation of electoral crimes falls under the jurisdiction of three entities: the Special Prosecutor for Electoral Crimes (Fiscalía Especializada Para La Atención De Delitos Electorales, FEPADE), the Electoral Tribunal of the Federation (Tribunal Electoral del Poder Judicial de la Federación, TEPJF) and the National Electoral Institute (Instituto Nacional Electoral, INE).

The INE is the federal entity responsible for organising and overseeing elections in Mexico. As mentioned in a previous section, following a 2014 reform of the electoral system, INE took over electoral management at the state and municipal levels (Serra 2016b), establishing local public organisms (organismos públicos locales, OPLEs), to coordinate and monitor elections during voting days. The 2014 reform also established that the INE would monitor and audit public electoral funding to national and local parties, and be in charge of redistricting at the national, state and local levels (Freidenberg and Aparicio 2016).

The TEPJF is the court charged with resolving controversies on electoral matters and protecting the electoral rights of citizens (Loya 2018). The 2014 reform made the TEPJF an autonomous state entity at the federal level whose leading magistrate is assigned and removed by the senate (Loya 2018). In 2018, the TEPJF launched a plan to make it more transparent and to involve the participation of civil society and citizens, while also creating strong ties to state electoral tribunals (Loya 2018).

Despite the recent development of institutional strengthening of electoral authorities, enforcement of sanctions for electoral crimes, including overspending on electoral campaigns or vote buying, there are still issues. For example, in the 2015 election, there were few applications of sanctions for parties found to have committed electoral crimes, barring one case where electoral authorities called for a do-over election in the state of Colima due to rampant irregularities (Serra 2016b).

Other stakeholders

Measures to counter corruption in Mexico, though recent in terms of official government initiatives, has been a hallmark of civil society and media participation in politics since before the transition to a multi-party democracy. The 2000s saw both a growth in the spaces allotted to civil society organisations and journalists in national debates about corruption, while at the same time suffering greatly due to the drug war, which often targeted media and civil society watchdogs for speaking out.

Beyond internal societal actors, brief mention should be made about actions taken by foreign governments to promote governance in Mexico. The United States, as one of Mexico’s biggest trading partners, has kept governance matters as a primary target for development aid to its southern neighbour. For example, during the first two years of the drug war, 20% of US development aid to Mexico went to strengthening democratic institutions and countering corruption within the security forces (Carpenter 2013). Under the Mérida Agreement, USAID has committed US$68 million towards strengthening the judicial system’s prosecutorial capacity, plus an additional US$26 million destined for anti-corruption CSOs (Meyer and Hinojosa 2018).

The United States and Canada established firm anti-corruption clauses and commitments in the recently signed agreement between the United States of America, the United Mexican States and Canada, aiming to establish clear communication channels to share information about corruption and illicit financial flows and to facilitate extradition for corruption crimes (Vallejo Montaño 2019).

Media

The constitution guarantees freedoms of expression, information and the press. According to Reporters Without Border's 2019 World Press Freedom Index, Mexico is ranked 144 out of 180 countries, with a score of 46.78. (Reporters Without Borders 2019) and scores 2 out of a possible 4 in the Freedom and the Media Index (Repucci 2019).

Since the beginning of the drug war in 2006, media organisations, particularly those involved in investigative journalism, have been direct targets of violence for reporting on crime or corruption. Since 2006, 112 journalists have been killed in the country (Reporters Without Borders 2019). In 2017, a journalist was attacked every 17 hours in cases usually involving instigation or inaction by public officials (Meyer and Hinojosa 2018). Reporting on corruption is particularly dangerous at state level as ties between drug cartels, security forces and municipal governments make it difficult to report on local politics without exposing the journalist to retribution, thus many media organisations choose to self-censor (Freedom House 2018).

A 2018 UN report stated that Mexico showed a “clear pattern of intimidation, harassment, physical violence and arbitrary detention of journalists and human rights activists aimed at silencing dissenting voices or stopping social movements” (Meyer and Hinojosa 2018). The federalisation of crimes against journalists in 2012 has proven ineffective at stopping the violence (Freedom House 2018)

Media organisations have also been the target of ethics concerns in Mexico. Before 2000, there are numerous documented cases of journalists and media organisations accepting funds or gifts from public officials to plant stories praising their government or to hide stories of mismanagement or corruption (Ramírez 2014). This trend saw a notable rise in the 1990s as private sector actors entering the market sponsored or paid media companies to ignore abuses. Ramírez (2014) notes, however, that new generations of journalists place more focus on journalistic ethics and are less prone to accepting gifts.

Media organisations have also come under scrutiny due to their close ties with federal legislators and the uneven distribution of federal publicity among media companies. The largest 30 TV, radio and newspaper companies receive a majority of allotted publicity funding, while online news sources with notable audiences and reach receive barely any (Baumunk and Sandin 2018). The Media Ownership Monitor accounts for this disparity based on the close ties of traditional media companies to regulators.

The 2019 GCB found that 36% of Mexicans believe journalists to be corrupt (Transparency International 2019a), while 35% of Mexican respondents of the 2018 Latinobarometro consider media somewhat or very trustworthy (Latinobarometro 2018).

Civil society

Freedom of assembly and association are protected by the constitution (Freedom House 2018). As of 2017, there were more than 40,000 active CSOs in the country (Sanchez 2017). Civil society has been at the forefront of the debate on corruption since the 90s and have maintained an active role in politics since the return to democracy.

CSOs have seen their share of violence during the drug war. They have been vocal about human rights and critical of security forces, and have seen high degrees of violence and intimidation directed at them (Reveles 2013; Baumunk and Sandin 2018). Various civil society leaders have been killed for speaking out against human rights violations and environmental issues at the local level. Human rights and anti-corruption organisations were also the target of government spyware surveillance which surfaced in 2017 (Scott-Railton et al. 2018). Victims of this surveillance were also subject to repeated tax audits (Freedom House 2018).

Many experts attribute the tendency of CSOs to create operative networks with other CSOs, and the generally high degree of professionalisation and technical knowledge in Mexican civil society to the unfortunate situation of violence and persecution that many civil society organisations suffer (Ackerman 2013; Reveles 2013). CSOs were also early adopters, and continue to be innovators, in the use of ICTs to monitor government abuses (Plascencia 2015).

The current legal and fiscal regime related to CSOs creates some impediments when acquiring funding from government and foreign sources (Baumunk and Sandin 2018). The current tax regime for CSOs requires considerable investment in internal accounting and management to meet with government requirements, and such investments are beyond some CSOs (Sanchez 2017). Furthermore, the anti-money laundering law creates barriers for civil society organisations who receive funding from foreign actors (Sanchez 2017)

CSOs have gained considerable importance since 2014 with passage of the Let 3de3, which showed the mobilisation capacity of civil society organisations around subjects of corruption. Between March and April 2016, civil society organisations like Transparencia Mexicana, Coparmex, IMCO and others were able to procure more than 634,000 signatures in favour of the initiative (MEX332). In several instances, the senate attempted to modify the original bill, but civil society pressure led to massive protests against any modification, leading the Ley 3de3 to pass without modifications.

The adoption of the CPC as the oversight body for the entire SNA is both symbolic and reflective of the role that citizens are meant to play in the system. As the principle role of the CPC is to control de actions of the coordinating committee and review anti-corruption policies, citizens have an institutionalised role in the SNA, without it constituting a testimonial or consultative role. The existence of CPCs at the state level also imply an important overture to citizens to integrate local accountability mechanisms.

References

Section 1
Query
Section 2
Overview of corruption in Mexico
Section 3
Forms of corruption
Section 4
Corruption by sector
Section 5
Legal and institutional framework