Accountability Missing in Mexico Politics

It’s hard to believe but some leaders of Mexico’s Institutional Revolutionary Party, or PRI, claim that recent revelations that Mexican banks made at least $650 million in illegal loans are a vindication of the PRI-controlled Mexican government.

Mind you, there is ample reason to believe that part of that money was used to finance the political campaigns of two PRI presidential candidates. Yet, argues one PRI representative in Mexico’s congress, the illegalities are a drop in the bucket of the $7.7-billion irregular loans discovered in an audit of the $70-billion bailout of the Mexican banking system in 1995.

What he means is that considering the amount Mexican taxpayers will have to pay to rescue a banking system that went awry because of an unwise nationalization in 1982, a hasty privatization in 1991 and bad banking practices, negligence and an irresponsible lack of bank supervision, the fraudulent part is small change.

But it is not of little consequence if any of the funds subverted the political system, as is suspected.

The audit, conducted by an independent team of Canadian auditors, came at the request of the opposition parties in the Mexican lower house, who wanted to know whether a Mexican businessman, currently jailed in Australia, had used his bank to contribute to PRI political campaigns and then was repaid through the banking rescue. Businessman Carlos Cabal Peniche says that he gathered $15 million from unidentified donors for the PRI in 1993 for the Luis Donaldo Colosio presidential race, made a $5-million contribution to a PRI governor’s campaign and another $4.5 million to the PRI in 1994.

The report does not really answer the questions that prompted the inquiry. It does not detail, either, how much of the $650 million in illegal loans were used for political campaigns. The Mexican Treasury has refused to turn over information regarding the banks in question, arguing that they are prevented from doing so by Mexican bank secrecy laws. Most likely, the whole issue of the ill-fated rescue will now die down with a whimper.

Even if the opposition in Congress proves that any money was used for political campaigns, it was “only,” as the PRI representative claimed, a portion of $650 million. And for the Mexican ruling class, that amount is a relative pittance. This is, after all, the same political class--or camarilla--that made it possible for the brother of former President Carlos Salinas de Gortari to amass, through “unknown” means, a fortune so formidable that he set aside more than $100 million in a Swiss bank account.

But this is not to suggest that the Canadian audit did not confirm some serious problems in the Mexican banking system, problems that will not disappear simply because the PRI manages to bury them for a while longer. The crisis is so severe that Mexican banks currently are not making loans, and without domestic credit, there can be no real economic expansion.

Why, one wonders, do these problems recur with such regularity in Mexico? Perhaps because for the past seven decades, Mexico has lived with a corrupt political system that demands the complicity of its political class in exchange for impunity.

Accountability is a word that does not exist in Mexico’s political system. Complicity and impunity are the rule. In the 1920s, when Plutarco Elias Calles conceived the party that would become the antecedent of the PRI, he envisioned a place where the revolutionary “family” that overthrew the Porfirio Diaz regime would gain, sooner or later, its reward. The system worked for the country for quite a while, especially for the members of the PRI who had faith in it. You could be in a government position during one term, and out the next, but would eventually come back in, as long as you were disciplined and willing to cover up any messes left by your predecessors.

Thus, from the populist presidents of the 1930s to the 1970s, to the neoliberal administrations of the last two decades of PRI governments, the one constant has been that the people never know who is accountable. Indeed, even with independent audits, they may never find out who is really responsible for the current debacle, much less who should be punished.

Occasionally, it seems that things in Mexico are changing. After all, the PRI is no longer the monolith it used to be and the opposition has gained ground in many quarters. But, as long as there are three main parties in Mexico, a divided opposition will continue to split the national vote and the PRI will continue winning and keep its opponents from national power. And that means impunity for those who are empowered.