Mexico’s Next Anti-money Laundering Czar Vows Action After ‘Shameful’ Odebrecht

Mexico’s incoming financial intelligence chief said it was “shameful” how little had been done about bribes that Brazilian construction firm Odebrecht executives said were paid to secure Mexican public works contracts, and vowed to reexamine the case once in office.

Santiago Nieto will head the finance ministry’s Financial Intelligence Unit, which analyzes suspicious financial records, once the new leftist government takes office on Dec. 1. He said in an interview last week that the unit had been misused for political ends, without elaborating.

“It’s shameful that Mexico and Venezuela are the only countries in Latin America that haven’t sanctioned anyone,” he said of the Odebrecht case, which is at the heart of Brazil’s Lava Jato, or Car Wash, corruption investigation that has reverberated across the region in recent years.

“In the case of Odebrecht, and in any other case, the first thing we would have to do is review what there is in the Financial Intelligence Unit related to the case,” he said. Nieto does not yet have access to files and records kept by the unit.

In Brazil, Odebrecht executives admitted to paying bribes within Mexico. Prosecutors in Mexico have said they are probing business between the Brazilian conglomerate and state oil company Pemex.

Pemex has declined to comment on issues related to Odebrecht, citing the ongoing investigation. The office of Mexico’s attorney general, the finance ministry and the Financial Intelligence Unit all declined to comment for this story. Odebrecht acknowledged receipt of an emailed request for comment, but did not respond further.

Anger at widespread corruption scandals, including the alleged bribes from Odebrecht, a lucrative house deal involving the family of President Enrique Pena Nieto, and hundreds of millions of dollars siphoned from government coffers through fake contracts, helped leftist Andres Manuel Lopez Obrador win a landslide presidential victory in July.

Lopez Obrador pledged in his manifesto to clamp down on financial crime, and tighten money laundering, banking and tax regulations. He has given few details of how he will achieve this, but promises to set an example of probity from the presidency.

Tasked with helping to prevent and fight money laundering and terrorism financing, the financial intelligence unit receives and analyzes information that it should then pass on to prosecutors to investigate and construct a case.

A former lead prosecutor for electoral crimes, Nieto was dismissed in 2017 on the grounds that he broke a code of conduct when he gave an interview about his investigation into Odebrecht bribery during the 2012 presidential campaign.

Nieto has admitted his mistake, but denies breaking rules or revealing sensitive information. He said his firing was illegal.

Last month, two incoming administration officials told Reuters that Odebrecht may be blocked from participating in public works projects under the new government.

Odebrecht responded that wrongdoing at the company should not be used to impose sanctions against it in Mexico.

Corrupt System?

Nieto said he would press for more information sharing between federal departments that investigate tax, electoral and organized crime, and investigate possible corruption within the system.

“I have the impression that there is a factor of internal corruption,” he said, without providing specifics.

The Financial Action Task Force, an international organization that sets global standards for fighting illicit finance, said earlier this year that in Mexico “financial intelligence does not often lead to investigations of money laundering, underlying crimes, and terrorist financing.”

Following the report, Mexico’s finance ministry and the attorney general’s office issued a joint statement recognizing shortcomings and promising to improve efforts.

However, the Mexican government seized just 871 million pesos ($46.3 million) and $14.7 million between September 2017 and June 2018, and began just one criminal proceeding, according to official statistics.

Nieto, who called the outcomes “terrible,” pointed to the financial intelligence unit and attorney general’s office as the two “bottlenecks” holding back cases.

“It is a matter of impunity, a complicit government, and a lack of political will to fight corruption,” Nieto said.
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