Mexico Hit by Major Bribery Scandal

Mexico is the latest country caught up in the swirling scandal over Brazilian construction firm Odebrecht’s multi-million-dollar bribes—and while heads are unlikely to roll, the political and economic fallout could get ugly, analysts warn.

The scandal, which has already felled a string of big names in Latin American politics and business, arrived at Mexican President Enrique Pena Nieto’s doorstep this week when allegations emerged that the former chief executive of state oil company Pemex, Emilio Lozoya—a close ally—took $10 million in bribes from Odebrecht to award the firm juicy contracts, AFP reported.

The payouts allegedly started in March 2012, when Lozoya was head of the international affairs office for then-candidate Pena Nieto’s presidential campaign.

That proximity to the president has raised eyebrows in Mexico, where Pena Nieto is already deeply unpopular over a series of scandals involving his inner circle and top figures in the ruling Institutional Revolutionary Party.

Lozoya, who headed Pemex from 2012 to 2016, is appearing before prosecutors next Thursday to answer questions about the accusations—which he denies as “false” and “malicious”.

Pena Nieto’s office likewise denied his campaign took bribes from Odebrecht, calling such suspicions “absurd”.

But the scandal threatens to deepen perceptions that the Mexican government is festering with corruption, less than a year out from presidential elections.

“The accusations against Lozoya will reinforce the already widespread discontent against President Pena Nieto’s administration, which is largely driven by voter perception that corruption is rampant,” said political analyst Carlos Petersen of consulting firm Eurasia Group.

That perception could damage the government’s much-vaunted campaign to attract foreign investment—and even its current negotiations with the United States and Canada on revamping the North American Free Trade Agreement, he said.