Graft Case Balloons in Mexico

A government audit of Mexico’s state-owned oil company has found that an additional $53 million is missing, bringing to $173 million the amount that President Vicente Fox’s administration says was improperly diverted to the oil workers union in the year before he took office.

Federal investigators said in January that they suspected that union leaders passed on most of the cash to the Institutional Revolutionary Party, the former ruling party, to finance its losing presidential campaign in 2000. The PRI, as the party is known, and union officials have denied any wrongdoing.

The probe of Petroleos Mexicanos, or Pemex, being conducted by the federal auditor general is the biggest corruption case to date for Fox, who rode into office promising to clean up the government. Authorities said Tuesday that three officials are under house arrest in the case, but they declined to identify them. No charges have been filed.

PRI officials have denounced the allegations as a smear campaign with no substantive evidence, a charge reiterated by a party spokesman Tuesday.

“We have no proof, no documentation, no communication,” he said.

Although other PRI officials have said the public disclosure of the probe amounted to a declaration of war, new party President Roberto Madrazo, installed Monday, has said he favors a complete airing of the charges.

The investigation covered a two-year period, tracing the movement of millions of dollars out of Pemex coffers to the oil workers union, known by its Spanish initials, STPRM. The union has long been a stalwart supporter of the PRI. The auditor general’s office said it has asked the attorney general to bring criminal charges in the case.

Former PRI leader Dulce Maria Sauri recently called Fox’s probe of Pemex part of a campaign to discredit the state-run oil monopoly in order to soften public opinion over privatizing the firm.

At a news conference Tuesday, Deputy Auditor General Eduardo Romero Ramos said former Pemex General Director Rogelio Montemayor authorized the cash payments to the union without obtaining the board of directors’ approval or making budgetary provisions. There is no proof that the cash was meant as a loan or that it reached the union rank and file, he said.

“There has been no apparent effort to recover these [funds],” Romero Ramos said, adding that the money still has not been accounted for. “There is no rationality whatsoever in these kinds of figures. In no cases did the Pemex officials have the right to transfer these funds.”

Asked whom he blamed for the cash transfers, Romero Ramos said those responsible included Montemayor, former Pemex Finance Director Juan Jose Domene Berlanga and union chief Carlos Romero Deschamps. There was no immediate comment from the three, but union officials have said it was common practice for Pemex to make loans to the union.

On Dec. 10, the auditor general’s office presented a complaint to the attorney general’s office alleging improper transfers of about $120 million to the union. On Tuesday, Romero Ramos said that further auditing turned up three more transfers totaling about $53 million.

A spokeswoman at the attorney general’s office said the investigation of the cash disappearance was continuing.