Old-Style Taint Is Feared in a New Democratic Era

For much of President Vicente Fox’s term, Arnulfo Montes Cuen was a prized ally. A spellbinding speaker in a black cowboy hat, he barnstormed rural Mexico, setting up farmers’ unions friendly to the ruling National Action Party and cementing their loyalty with access to government aid programs.

Then the 41-year-old organizer fell out with the party and became a whistle-blower, triggering an investigation into the biggest case of alleged illegal funding to surface in this year’s presidential race.

As Montes tells it, Fox’s government had authorized $5 million for him to buy building materials and distribute them to thousands of poor farmers. But there was a catch: He was to kick back half the money to the campaign of Felipe Calderon, the National Action Party’s presidential candidate.

Montes refused and was booted from the program. He is pressing criminal charges against 12 officials of the government and the party, known as the PAN, for allegedly replacing him with someone willing to divert the anti-poverty funds to Calderon’s war chest.

Fox and his conservative followers rode into office in 2000 on a wave of popular revulsion against the Institutional Revolutionary Party, or PRI, which had monopolized federal power for seven decades. But their campaign to perpetuate PAN’s rule appears to mirror many of the PRI’s unscrupulous uses of incumbency.

As a result, Mexico’s electoral bodies are facing their biggest test of the new democratic era: Six years after managing the historic election that toppled the PRI, can they coax a freely chosen government to play fair enough to ensure a credible vote on July 2?

Already, the left-leaning Democratic Revolution Party, or PRD, has warned it may take to the streets at the first hint of a tainted PAN victory.

By U.S. standards, Mexican election campaigns are highly regulated and well mannered. Mexico’s Federal Electoral Institute allocates each presidential candidate $60 million in public funds and caps spending at $80 million. Corporate donations are outlawed, and contributions by individuals are limited to $100,000 per candidate.

Candidates’ speeches and ads must refrain from defaming opponents. And by unwritten custom, presidents are expected to stay out of the campaign.

Nonetheless, Fox until recently made massive use of public service announcements to promote his party’s achievements. And thousands of messages denigrating the leading opposition candidate, Andres Manuel Lopez Obrador, have flowed from e-mail addresses in Fox’s administration.

Fox’s former social development minister, Josefina Vazquez, has been accused of taking copies of public welfare rolls when she resigned and using them in her current job as a top PAN strategist to identify targets of campaign largesse.

Opposition parties say the alleged diversion of the $5-million anti-poverty grant is part of a wider effort to extort campaign money from government contractors. This week the head of a private security company, Grupo Operativo Internacional, lodged a criminal complaint accusing Fox’s Social Security Administration of demanding a 10% kickback for the Calderon campaign in exchange for approval of a $5.2-million contract to provide guards for public hospitals.

The Fox administration has denied some of these charges, and the PAN has accused rival parties of numerous violations of election rules, including skimming funds from state and local governments they control. Election officials are struggling to referee an increasingly acrimonious contest and shore up public trust, and admit that their capacity to stop the most flagrant abuses is limited.

Thanks to reforms enacted in the 1990s, Mexican elections no longer are the farces the PRI won by turning vote fraud into a fine art. The Federal Electoral Institute has developed one of the most sophisticated systems of voter identification and vote tabulation in the world.

But critics say the measures prevent only the crudest manipulation of the vote.

“The reforms were aimed at gross fraud -- practices such as alteration of returns, doctoring of electoral lists, stealing and stuffing of ballot boxes. Those tricks are now a thing of the past,” said Jesus Cantu Escalante, one of nine independent “citizen counselors” who led the electoral institute from 1996 until 2003. “But what we didn’t foresee were other forms of fraud emerging -- the abuse of government resources, the flow of illegal money into campaigns.”

Both the PRI and PAN were fined heavily for sneaking illegal funds into the 2000 campaign, but no candidate was penalized, and both parties responded by blocking further electoral reform in Congress and obstructing the PRD’s nominations to the electoral institute.

Lorenzo Cordova, an advisor to the electoral institute in that campaign, said the panel cannot adequately vet widespread suspicion that the parties are up to the same funding tricks.

“This is something we cannot know for sure, because the electoral institute has no power to audit these reports until after the election,” Cordova said.

Nor can electoral authorities subpoena individuals’ bank records or require political parties to report contributions received before the start of the six-month campaign.

With none of its nominees on the electoral institute, the PRD has cast suspicion on the panel’s decisions, particularly its months-long hesitation to censor PAN ads attacking Lopez Obrador as “a danger to Mexico” and to negotiate an end to presidential public service announcements.

PRD campaign aide Manuel Camacho Solis has said that Fox’s interference in the election already had been “reason enough to annul it.”

Luis Carlos Ugalde, president of the electoral institute, contended that its decisions were legal and unbiased. In an interview, Ugalde said the electoral institute now had “more tools to ensure fair play” than it did in 2000. “But I should also say there is continuing concern,” he said.

“The cleanliness of the vote is guaranteed, and what we have to achieve is getting to July 2 with the best political conditions for an election.”

Ugalde acknowledged that reforms were needed to make handouts from welfare programs “absolutely transparent,” but he said he had no authority to investigate the alleged diversion of such funds to the campaign.

That task falls to a special prosecutor for electoral crimes, Maria de los Angeles Fromow, whose neutrality is questioned because she is a Fox appointee.

Fromow said the case brought by Montes, the rural organizer, was “not simple to reconstruct” and offered no assurance that it would be resolved by election day.

Montes laid out his version of events in a 152-page affidavit to the special prosecutor’s office and an interview with The Times. He said the congressman running Calderon’s campaign in Colima state, Jorge Luis Preciado, summoned him to a Mexico City restaurant, handed him two deposit slips and ordered him to divide the kickback between two bank accounts the congressman controlled.

Preciado said he did not recall such a meeting with Montes, and the Fox administration denied placing any conditions on distributing the grant.

When Montes balked at the payoff, he said, the congressman told him: “Don’t worry. Those Indian peasants will never notice.”

In Chapantongo, 60 miles north of Mexico City, the peasants noticed. Some families received only half the promised supplies, and others were dropped from the grant list, administered by a previously unknown civic organization linked to the PAN.

“They left me these 20 bags of cement and promised to deliver the rest of the materials but never came back,” said a dejected Alejandra Beltran, 47, standing on the weed-covered lot where she hopes to build a home with two bedrooms, a kitchen and a bathroom.

For the time being, she remains in a one-room hovel a few blocks away, sharing a bed with three teenage children under a leaky roof.

“We’re asking what happened to the money that was budgeted for the materials that never arrived,” said Jesus Ocampo, a farmer who had helped gather applications for the grants in Chapantongo. “They say it went to Felipe Calderon’s campaign. If that’s true, then the PAN is as big a bunch of thieves as the PRI.”