Mexico enforcement agencies eye ‘low hanging fruit’
Tuesday, March 5, 2019 at 9:18AM
Luis Dantón Martínez Corres in Mexico, National Anti-Corruption System

Mexico has been moving forward with its National Anti-corruption System (NAS) that began with a reform of the Constitution in 2015, followed by new laws that partially came into effect in 2017 and were half-heartedly implemented in 2018. 

The prolonged implementation has caused fatigue, leaving the impression that things were moving too slowly, particularly when compared with other Latin American peers that have made significant strides in the enforcement of their anti-corruption laws. However, this situation is changing rapidly in Mexico and enforcement will likely soon pick up the pace. 

Key institutional changes

Among the most significant legislative developments that have taken place during the transitional period between the July 2018 election and the swearing of the new President in December 2018 is the enactment by Congress of a new law that creates the Chief Prosecutorial Office (Fiscalía General de la República), which replaced the former Attorney General Office (Procuraduría General de la República).

Beyond the name change, this transforms the institution into an autonomous entity. The change is also significant given that the new Chief Prosecutor will spend nine years in office, a previously unseen tenure for this kind of position.

Key appointments

In January 2019, Alejandro Gertz Manero, a former Attorney General of Mexico, was appointed by the Senate as the country's first Chief Prosecutor. Mexico was without an Attorney General since October 2017 and was managed by the Deputy Attorney General on an interim basis.

The new Chief Prosecutor of Mexico has selected Maria de la Luz Mijangos Borja and submitted her appointment to confirmation by the Senate as the first Chief Anti-corruption Prosecutor. This confirmation will be firm by March 9 as her nomination was very well received and the Senate is not expected to challenge it. Mijangos Borja has relevant government experience in judicial, budgetary accountability and anti-corruption areas and is widely respected in academic circles where she has had a longstanding and distinguished career.

New laws will come into effect

The amendments to the Criminal Code grouped under section “crimes arising from corrupt situations” will enter into effect when the new Chief Anti-corruption Prosecutor is appointed by the Senate. Such amendments include bribery, intimidation, abusive exercise of authority, influence peddling, embezzlement of public funds and illicit enrichment. The core subject matter of corrupt offenses.

Public opinion is calling for stronger anti-corruption enforcement

A recent public opinion study by Parametría, the leading polling firm in Mexico that most closely predicted the Presidential election outcome last July, offers us insights into current public opinion on the topic of corruption:

68 percent think that corruption has increased in the last 12 months vs. 8 percent who think it has decreased. 30 percent think that corruption will decrease in the next 12 months vs. 19 percent who think it will increase.

The support for measures that could be taken by the next government is: 

86 percent think that the government should increase the number of jail years for politicians that stole public funds, 84 percent think that corrupt ex-presidents should be put to trial and incarcerated, 62 percent think that an independent anti-corruption prosecutor must be created, and 14 percent think that corrupt politicians should be pardoned to guarantee the political stability of the country.

These numbers paint a clear and predictable picture of what public sentiment is.

The new President, Andres Manuel López Obrador, AMLO for short, intends to call for an ad hoc public consultation or referendum in March to decide whether corrupt ex-presidents and former public officials should be put to trial and incarcerated. Given that 8 in 10 Mexicans polled by Parametria are in favor of putting ex-presidents on trial, and if convicted sentencing them to jail, there will be no surprise where such ad hoc public consultation will lead to.

Mexico slid to #138 in the 2018 CPI

Mexico continued to trend down in the recent update of the TI ranking, sliding three places to 138 of 180 countries. Countries also ranked in position 138 are Guinea, Iran, Lebanon, Mexico, Papua New Guinea and Russia. In Latin America only Venezuela, Guatemala and Nicaragua are ranked lower than Mexico. Public shaming, like falling on the CPI, further creates momentum for the enforcement of anti-corruption laws in Mexico.

There's low hanging fruit (like Odebrecht)

Key cases that have not been properly addressed, such as Odebrecht, are low hanging fruit that will jumpstart the enforcement of NAS as soon as the new Anti-corruption Prosecutor is confirmed.

The Ministry of Finance FIU chief and key player in the anti-corruption system of Mexico, Santiago Nieto, has stated that Mexico and Venezuela are the only two countries where no significant action has been taken against Odebrecht. He also hinted that the government is preparing to take action in the Odebrecht investigation that could result in enforcement.

Odebrecht isn't the only case pending. The past few years have yielded abundant cases pending prosecutorial review and will likely be investigated by the new administration.

Fasten your seatbelts

Even though many questions remain regarding the commitment of the new administration to the NAS, the logical conclusion is that investigations and enforcement is likely to rise in Mexico.

Nothing promotes more compliance than enforcement, so we should also see an increased interest in companies doing business in Mexico to strengthen their compliance programs with a renewed sense of urgency. Better to be safe than sorry, right?

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Luis Dantón Martínez Corres, pictured above, is the partner leading the Compliance, Anti-Corruption and Investigations practice of the Mexico-based law firm, Ritch Mueller. He can be contacted here.

Article originally appeared on The FCPA Blog (https://www.fcpablog.com/).
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