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Mexican daily: Pemex admits "serious" corruption

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(Globalpost/GlobalPost)

Mexico City, May 17 (EFE).- State-owned Petroleos Mexicanos admits that "serious" corruption exists in some areas of the company and that contracting processes in particular have been plagued by "interference from organized crime," a leading Mexican daily said Friday.

In a front-page story, El Universal said Pemex representatives and members of the Mexican Construction Industry Chamber drew that conclusion at a meeting in late April.

Pemex executives acknowledged that corruption is fueled "by the elevated potential economic benefit of illegal acts, impunity and the spaces opened up due to unnecessary flexibility," the newspaper reported.

El Universal's story was published just days after rival daily Reforma reported that Pemex was suing former company executive Cesar Nava in the U.S. courts for his alleged involvement in a conspiracy to defraud the oil giant.

Nava, erstwhile chairman of Mexico's conservative National Action Party, has been named in briefs expanding the $500 million lawsuit Pemex filed last December against Siemens AG and South Korea-based SK Engineering & Construction Co. for ostensibly bribing Pemex executives, Reforma said.

As Pemex's legal director in 2002, Nava intervened to stop the company from collecting $102.8 million from Siemens and SK to compensate for contract violations in the overhaul of the Cadereyta refinery, according to the court documents cited by that daily.

The defendants obtained $182.4 million by systematically overcharging Pemex for work on the refinery, the lawsuit maintains.

According to El Universal, during the meeting with construction industry executives, Pemex officials said there was "interference from organized crime" in the state oil monopoly's contracting processes.

That has led to "serious levels of corruption" within some Pemex segments, and company executives acknowledge they have not been able to put a halt to that activity, in part because many cases "have become lost in the courts."

The company has not commented publicly on the matter.

Pemex has a monopoly on crude production and fuel distribution in Mexico, but the government is expected to present a bill in the coming months that could open the energy sector to more competition while also reducing Pemex's tax burden.

http://www.globalpost.com/dispatch/news/agencia-efe/130517/mexican-daily-pemex-admits-serious-corruption