AMLO exposes massive theft within state-run oil company

Mexicans are used to corruption scandals and, indeed, newly elected progressive president AMLO has made the fight against corruption the center-piece of his campaign to transform the country

By Pedro Gellert

Regeneración, january 8, 2019. Mexicans are used to corruption scandals and, indeed, newly elected progressive president Andrés Manuel López Obrador (AMLO) has made the fight against corruption the center-piece of his campaign to transform the country.

But the sheer extent of the theft of fuel from the state-owned oil giant Pemex has shocked even the most jaded observers.

In recent days AMLO disclosed that the scope of the theft, which has been going on for many years and through past presidential administrations, reached a whopping 73 billion pesos (3.77 billion dollars) last year. This is more than the budget of the national university and could finance numerous much-needed social programs nationally. In some states, theft accounts for 40% of total production.

In the past, officials charged that “organized crime” was responsible for the massive theft, popularly known as huachicol, and that it occurred at pipelines in different localities. However, AMO has revealed that 80% corresponds to company and corrupt union officials, with the complicity of top state and federal government officials, including from within past presidential administrations. “Very powerful interest groups were created,” the president said. Concentrating on low-level theft is merely a diversion, he added.

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In recent days AMLO has sent in 4,000 troops to monitor 73 Pemex installations, distribution centers, and refineries. In the past 20days, as a result of the new administration’s measures, theft has dropped by 50%, with savings reaching 2.5 billion pesos (about 130 million dollars). AMLO indicated that there is no time limit on the military’s presence in the oil company’s installations.

Among those on the losing end will be the notoriously corrupt and anti-democratic Pemex union leader Carlos Romero Deschamps, whose gangster-ridden union was responsible for managing the company’s restricted and strategic areas, including its Monitoring Centers. With new legislation in the Senate -in which AMLO’s party Morena commands a majority- to codify union democracy, Romero’s days may be numbered. In 2000 Romero was involved in what became known as Pemexgate, in which 53 million dollars was channeled to the election campaign of the ruling Institutional Revolutionary Party from oil company finances through the union.

Thus far only three officials have been arrested, but others are under investigation and the number will surely grow in coming days and weeks.  AMLO has spoken of hundreds and possibly thousands of corrupt officials being involved and has said the investigations would be carried out to their final consequences. This leaves open the possibility of putting the past three presidents on trial.

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Prior to the wave of neoliberal policies privatizing part of Pemex’s operations, the oil company provided 40% of the national budget. This figure plummeted to 17% under past president Enrique Peña Nieto. Part of the difference was paid for by the Mexican public through high gasoline prices, which are even above those of the United States. Of the world’s oil producers, Mexico has the highest domestic gasoline prices.

Despite temporary problems of shortages in some gas stations, particularly in states such as Jalisco, Tamaulipas, Michoacán, and Guanajuato (which the government is rapidly trying to resolve), on Monday AMLO made it clear that there would be no turning back from the campaign against theft and corruption in Pemex.