Ex-Pemex Chief Gets 10 Years for Fraud

A criminal court in Mexico has found Jorge Diaz Serrano, the former director of the giant government oil company Pemex, guilty of fraud in a $34-million kickback scheme involving the purchase of two oil tankers.

The court sentenced Diaz Serrano to 10 years in prison and fined him the equivalent of $54 million.

The case was seen as a measure of the seriousness of Mexican President Miguel de la Madrid’s war on corruption, known as “moral renovation.” Diaz Serrano is one of two high-ranking officials of the previous administration currently in court on corruption charges.

Diaz Serrano, who considers himself a victim of a political vendetta, said he will appeal. “This stupid sentence ends a frivolous process of which, for political reasons, I have been a victim,” he said.

The sentence was handed down late Wednesday by the 9th District Criminal Court, which holds its sessions at the South Penitentiary on the outskirts of Mexico City. The trial took almost four years, an unusually long time even for the slow wheels of Mexican justice.

The duration of the trial led some Mexican observers to suspect that Diaz Serrano was a “sexennial prisoner”--that is, intended to stay in jail the length of the six-year presidential term but not much more. Diaz Serrano, having spent almost four years in jail already, will probably be granted four years’ credit for good behavior, meaning that he would be released in two years, after De la Madrid leaves office.

The fine, which includes interest, may be taken out of proceeds from the sale of Diaz Serrano’s property, which the government has embargoed. Besides real estate, he is said to own an extensive collection of Mexican and French art.

In its court case, the government showed that Diaz Serrano arranged the purchase of the oil tankers from a Belgian company through a paper intermediary company in Liberia. However, it never tried to show what Diaz Serrano earned from the sale, even though, under Mexican law, a case of fraud must show “unlawful gain.”

In his defense, Diaz Serrano claimed that the price paid for the ships was just. As for buying the ships through the Liberian company, instead of directly, Diaz Serrano said that he merely signed the purchase order and that the sale itself was arranged by underlings.

In any event, the sentence eliminates a festering political problem as Mexico enters its presidential campaign season. De la Madrid is expected to choose in September the candidate of his Institutional Revolutionary Party, which has never lost a presidential election. Traditionally, the administration tries to clear away leftover embarrassments before the heir is chosen.

A case of extortion and illegal possession of arms is still pending against Arturo Durazo, the former police chief of Mexico City. Durazo’s trial has been under way for just over a year.

Both Durazo and Diaz Serrano were appointed by De la Madrid’s predecessor, Jose Lopez Portillo. Signs of high-level corruption during the Lopez Portillo administration touched off a public outcry, and when De la Madrid took office in 1983, he responded with the prosecutions against the pair, as well as with new laws to reduce bureaucratic bribery and embezzlement.