Mexico’s Greased Palms Getting Clapped Into Handcuffs

They call it “the little coffee,” “the stuffing,” “the bite.” Policemen ask for their “soda,” journalists for their “squash” and politicians for their “bone.”

There are plenty of words in Mexico’s lexicon for the corruption that runs through its society from top to bottom.

No one has a real estimate of how much money changes hands. Drug dealers pay billions to keep their operations running smoothly. Pretty much anyone who has driven a car in Mexico has been hit up for a bribe by a cop, and anyone needing government paperwork has been offered two ways to do it: the easy way or the slow way.

Corruption is so rooted and pervasive that many people see nothing wrong with it. A continuum runs from tipping a waiter to bribing a politician, with no clear line separating what’s acceptable and what’s not.

That’s slowly starting to change. With a political opening that has allowed opposition parties to seize power on the local and state levels for the first time in 70 years, abuse of power is being placed on the political agenda.

On Nov. 23, 44 police officers were arrested in a sting in Mexico City on warrants that dated back as far as 1991. The charges included rape, robbery, murder and abuse of authority.

City Atty. Gen. Samuel del Villar credited Mayor Cuauhtemoc Cardenas with the first serious attempt to clean up Mexico’s police forces. Cardenas belongs to the center-left opposition, the Democratic Revolution Party.

Indignation Leading to Gradual Change

But even leaders of the ruling Institutional Revolutionary Party are becoming more serious about corruption.

“I share the indignation of all Mexicans at the inefficiency and the corruption which all too frequently exist in our security forces,” President Ernesto Zedillo said in August, his voice choking with anger as he announced a “national crusade” against crime and corruption.

In many cities, new leaders with few ties to the old ones are discovering age-old practices so brazenly corrupt that they marvel they weren’t noticed before, and they are beginning to tackle the graft that bites deep into the Mexican economy.

But on most levels, corruption continues as ever. Police take bribes rather than write tickets, journalists accept money for writing favorable articles, and government purchasers pocket a percentage of any contract.

And many believe that will never change.

It’s rush hour in Mexico City, and a bus spreads a cloud of exhaust over the seafood tacos and cocktails at Hildaro Vazquez’s food stand. With a tarp covering two plastic tables, it isn’t much of a restaurant, but it’s the kind of business that keeps millions employed in what may be the world’s largest city.

Every Sunday, Vazquez pays 100 pesos, or $10, to the local “leader,” a woman who collects bribes from 300 such stands in the neighborhood of La Viga. She relays part of her take to government officials and police commanders, who in turn look the other way.

For Vazquez, it’s a good arrangement.

“She goes to the borough hall to pay them off,” he said. “I don’t know how much; maybe half? I don’t know how she works it, but I’ve never had any problem.”

Asked how much it would cost to register his stall legally, Vazquez stared back in silence. To him it was a stupid question. Pressed for an answer, he finally grinned, revealing two gold-capped teeth. “You can’t,” he said. “There are no permits.”

Still, the signs of change are evident. Last December, Cardenas took office as elected mayor of Mexico City after 70 years of regents appointed by the ruling party. For the first time, someone other than the person who kept the books was reviewing them. What they are finding isn’t pretty.

City purchasing contracts are signed at unbelievably high prices; presumably the excess is split between buyer and seller. City revenues are minuscule because people bribe officials rather than pay fees and fines. Protection rackets are city-sponsored, with enforcers on the street--cops, inspectors--giving a cut to their superiors, who in turn give their superiors a cut. . . .

One of the city’s 16 boroughs did away with construction inspectors’ graft by writing clearer specifications and making builders apply for permits at the borough office instead of having inspectors visit the sites.

The result: In the first five months of the year, revenues for that division rose to $620,000 from $290,000 for the first five months of 1997.

“All that money went into the pockets of corrupt officials,” borough head Jorge Legorreta said.

He said many of the crooked inspectors were fired, but some of them went on collecting bribes from builders who were unaware that the inspectors had been dismissed.

Overall, about 2,000 government workers were punished for corruption in the first 10 months of the Cardenas administration, according to city comptroller Gaston Luken Garza. They paid fines totaling $38 million. In the comparable period last year, Luken said, about 1,140 people were punished, generating fines equivalent to just $560,000.

That’s a 75% increase in punishments--and a 6,700% increase in fines.

Still, even Luken acknowledges that most graft goes unpunished. When a cop is caught taking a bribe, in many cases he gets off with a warning if he gives the money back, said Lourdes Solano, a lawyer in a city office that takes complaints against police officers.

“If he’s willing to pay back the money, that minimizes his degree of responsibility,” she said.

Her bosses refused to let a journalist sit in on a confrontation with a corrupt officer, saying that would discourage an amicable arrangement.

Paco Ignacio Taibo II, a prominent writer, makes what for a Mexican is an extraordinary claim: He has never paid a bribe.

It hasn’t been easy. He has been dragged into police stations at least five times, has waited two months for paperwork he could have had in two hours.

“I’ve invested a lot of time and effort,” he said. “It isn’t easy to be honest in this country.”

But Taibo, a close ally of Cardenas, said that’s starting to change in Mexico City.

He pointed to a diseased tree on the sidewalk outside his apartment. He said he called the city to cut it down last year. When the workers who showed up demanded 300 pesos ($30), he refused to pay.

A few months ago, he called again, and the workers silently dealt with the tree.

“They were the same men who had come before,” he said. “I just stood there smiling at them.”

If it’s hard to live in Mexico without paying a bribe, it’s even harder to do business without at least a little dirty business.

Most stores will ask customers if they need a receipt. If so, they add 15% sales tax. If not, no tax is paid and the government is none the wiser.

On a larger scale, the graft is more complex, as shown in the bidding for a typical construction project, according to two distributors who spoke on condition of anonymity.

The company opens the bidding, and competing suppliers turn over their bids to the purchasing agent. The agent talks to the suppliers and asks by how much--5%, 10%--they are willing to inflate their bid and give him the difference in cash.

The bidders, meanwhile, pay bribes to find out the amount of the other bids, and make theirs a smidgen lower.

The agent picks the supplier, has the supplier raise his bid to cover his take, then fakes the other bids to seem higher. He makes the purchase and pockets his percentage.

Often the company then rewrites the contract, putting down a lower cost to pay less tax.

That process is repeated both in private and government contracts, the suppliers said. Military purchasers almost always require a 10% payoff.

At the high end, in October Swiss investigators seized more than $100 million in accounts owned by Raul Salinas, brother of Mexico’s former president. They said the money was drug bribes he collected during his brother’s administration, when he worked at a government food agency.

Raul Salinas, who is imprisoned in Mexico, denies the charges.

A Christmas Tradition: Extra Police Extortion

Despite the attacks on corruption, Mexico continues to function with a mentality that bypasses the government while bribing government officials to look the other way.

The government estimates that 45% of Mexico’s workers are unregistered, making up what is known as the informal economy.

Mexico City has 3.2 million cars but only 2 million people have drivers’ licenses, according to city officials. The others slip a little money to police officers who stop them.

According to Francisco Labastida Ochoa, the interior secretary and overseer of national security, only 2.5% of all crimes lead to an arrest--and no one knows how many lead to conviction. Much of the problem, many believe, is that police are slow to investigate cases unless they stand to profit.

It is estimated that only half of all crimes are reported, which Labastida blames on “a lack of credibility of the justice system.” He acknowledges that there are police who collude with criminals and commit crimes themselves.

On Nov. 23, police had to use a trick--inviting officers to a training course at the police academy--to serve arrest warrants on at least 44 officers. Authorities acknowledged it was just the beginning of what would be a major, long-term crackdown.

For many police officers, graft is an important part of their income. Mexico City cops make an average of $350 a month; officers elsewhere often make less.

“We are coming into the Christmas season, a traditional time for the police to increase street extortions,” Mexico City security consulting firm Problem Solvers wrote in a newsletter dated late November.

“Accordingly, it behooves all of us to exercise more prudence in the street. . . . Do not give the police the opportunity to take advantage of you.”