The Dallas Morning News
Saturday, September 20, 2003

Pemex oil profits were used in bid to grease political skids

Fox withstood PRI's 11th-hour power grab, targeted corruption

By BRENDAN M. CASEStaff Writer / The Dallas Morning News

MEXICO CITY As Vicente Fox was closing in on the Mexican presidency in the summer of 2000, the long-ruling Institutional Revolutionary Party made a last-ditch
attempt to retain power by pumping gobs of cash into its campaign.

The source of the money: state-owned oil monopoly Petróleos Mexicanos.

Pemex union bosses illegally funneled at least $45 million to the party, their political patron, in a deal now dubbed "Pemexgate," prosecutors allege. The money originally
came from Pemex itself.

Mr. Fox won anyway, partly by blasting Mexico's ingrained corruption. Over the years, a goodly share of that corruption has stemmed from Pemex, the nation's largest

Pemex has long been a pillar of national pride. But it's also been a wellspring of graft.

One former boss, Jorge Díaz Serrano, was imprisoned in the 1980s on charges that he had pocketed tens of millions of dollars from a deal to buy oil tankers. Former
union chief Joaquín Hernández Galicia went to jail in 1989 after amassing enough weapons to outfit a small army.

Raúl Muñoz Leos, a former private sector executive who is Pemex's current boss, has compared corruption within the company to the proceeds of Mexico's powerful
drug traffickers. Asked this year whether internal corruption could be as high as $1 billion a year, he said that figure was in the ballpark.

Mr. Muñoz Leos has aided anticorruption investigators since taking over almost three years ago. Still, investigations by federal auditors found evidence of continuing
kickbacks by contractors.

Pilfered gasoline is another source of corruption, as people seek to evade the nation's steep gasoline tax. Federal officials say the value of lost gasoline sales approaches
$1 billion per year. Some Pemex employees probably supply the black market, analysts say.

As for Pemexgate, the director general who allegedly oversaw the transaction, Rogelio Montemayor, faces extradition proceedings in Houston. Electoral authorities
slapped the Institutional Revolutionary Party with a $90 million fine.

Union treasurer Ricardo Aldana, who doubles as a senator with the PRI, recently survived an attempt by Mr. Fox's party to strip him of congressional immunity. His
Senate term expires in 2006.

Carlos Romero Deschamps, the union's current boss, lost his congressional immunity when he exited the lower house of Congress in August. So far, however, he
remains a free man.