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On the run; haughty evasion of justice by central Pemexgate figure Deschamps exposes problems with Mexican legal system.

At the beginning of September, it looked like oil workers' union chief Carlos Romero Deschamps' time had run out. As his three-year term as a federal deputy ended, so did the immunity from prosecution conferred on him as a member of Congress. Deschamps stands accused of playing a central role in the so-called Pemexgate scandal--the alleged siphoning of hundreds of millions of pesos from the state-owned oil company Petroleos Mexicanos (Pemex), through the oil workers union, and into the coffers of the Institutional Revolutionary Party (PRI).

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In late September, federal Judge Jose Luis Moya issued the first arrest warrant for Deschamps to face charges of embezzlement. Deschamps had maintained a low profile after leaving office, and rumors flew in the local press that he had fled the country. When the arrest warrant was issued, federal agents began watching the nation's airports to prevent his flight.

But Deschamps has so far managed to avoid the inside of a jail cell through legal maneuvers. His lawyers have kept him free by turning to a type of injunction, known as an amparo, that can be used to block arrest. His legal team anticipates that he eventually will face trial, and they are confident he will beat the rap.

Deschamps could face up to 12 years in prison if convicted of embezzlement. But in Mexico, embezzlement is not considered a felony, and even if found guilty, Deschamps could walk free by paying only a fine. As a board member of Banorte who is rumored to have amassed a considerable personal fortune. Deschamps should have no trouble paying his way out of this mess.

MANY HANDS IN COOKIE JAR

Besides Deschamps, 11 other officials from Pemex, the union and the PRI finance committee face charges, including Sen. Ricardo Aldana, also the union treasurer, and then-Pemex director and former Coahuila Gov. Rogelio Montemayor. Since the case involved so many high-level PRI officials, it rapidly became politicized and disrupted relations between Fox's National Action Party (PAN) and the PRI in Congress.

"Pemexgate generated a lot of tension between a government taking power and a government thrown out of office," said Carlos Ugalde, a political analyst with the think tank CIDE in Mexico City. "The case greatly complicated the negotiation of reforms during Fox's first years in office."

President Fox sailed into office in 2000 promising to clean up the rampant corruption that has long plagued the government. Here the rule of law has often seemed more like a tool for the powerful to get away with robbery than an effective institution to punish such offenses. Soon after taking office. Fox's Comptroller General Francisco Barrio, a former governor of Chihuahua, began talking about netting some of the "big fish" in the pool of the PRI who had enjoyed immunity from prosecution under the rigged system of perennial one-party rule.

Late in 2001, the Federal Comptroller's Office discovered a series of irregular loans from Pemex to its union. After the auditors turned the evidence over to the Attorney General's Office (PGR) to investigate, a series of leaks from within the administration gave the local press the story they had been waiting for. Soon Pemexgate was the scandal of the day.

According to government auditors, top Pemex officials signed over a series of suspect loans to the union for hundreds of millions of pesos. The first loan, signed June 5, 2000, gave 640 million pesos to union heads Deschamps and Aldana. The loan was approved without going through the proper bureaucratic channels and exceeded budget limitations. Documents showing the funds were used for the supposed "labor and legal" obligations cited by the union were never obtained. In the following months, several other suspect loans were processed for a total of 1.64 billion pesos.

POLITICS FIRST, JUSTICE LATER

Agents of the PGR's unit on organized crime arrested three members of the PRI's finance office and granted them protective custody to turn state's witness. With their testimony and bank records, prosecutors compiled evidence they said proved at least 500 million pesos of the loans were funneled to the PRI in the final days before the July 2 elections. As this information surfaced in the press via government leaks. PRI politicians became outraged. They accused the investigation of being a politically motivated witch hunt mounted by Fox's government to discredit the party. When Fox's prosecutors moved to strip Deschamps and Aldana of their congressional immunity as lawmakers took up sessions in fall 2002, the indictments became a major stumbling block to negotiations. Lawmakers stormed out of the congressional halls on various occasions. contributing to the deterioration of executive-legislative relations. Meanwhile, Deschamps muscled the union to threaten a major strike at Pemex during fall 2002 wage negotiations.

In the ensuing months little happened with the case. Deschamps and Aldana were safely immune as lawmakers, although they rarely attended legislative sessions. The rest of the players in the scandal had all long fled the law. Montemayor surfaced in Houston, where he is battling extradition. After the PRI made gains in midterm elections in July 2003, the government's case suffered a major blow. Prosecutors dropped felony charges of money laundering and criminal association against the accused, after determining the source of the funds, Pemex, could not be construed as illicit.

Juan Velazquez, Deschamps' lead lawyer, had long argued the law didn't support prosecutors' accusations, and in the end he was proved right. The government's case received another setback when the newly elected Congress took office this fall. The PAN president of the Lower House called for a vote on the motion to strip Aldana of immunity. The PRI, strengthened by mid-term elections and aligned with smaller parties, squashed the vote, leaving Aldana indefinitely safe.

Pablo Gomez, a lawmaker for the Party of the Democratic Revolution (PRD), said the PAN and PRI struck a deal on the vote, agreeing to sacrifice the call of justice in the hopes of brokering political deals on Fox's reforms.

STALLED INVESTIGATION

Gomez--a former representative of the Federal Electoral Institute that earlier this year fined the PRI a record 1 billion pesos over the illegal financing--said there was no doubt about the evidence of money being siphoned into the PRI from Pemex. But he said it couldn't be proved conclusively the funds went into the campaign to the PRI's 2000 presidential campaign as government leaks had suggested.

Other members of the new Congress say they are committed to keeping Pemexgate, or any other criminal probe that might arise, from contaminating political negotiations. PRI Dep. Rene Meza Cabrera said the accusations against Deschamps, Aldana and the others "have nothing to do with the political work ahead of us in the Chamber of Deputies." His view was echoed by PAN Dep. Ruben Mendoza Ayala, who said passage of Fox's planned tax, energy and labor reforms was urgently needed for the good of the stagnant economy. "We can't let a few corrupt officials get in the way of the progress of the nation," Mendoza said.

PROBLEMS WITH THE SYSTEM

Whether or not Deschamps is guilty, his case has become emblematic of the need for judicial reform in Mexico. Mendoza points to the legal tool of amparos as a "deficient" law that allows too many of the rich and powerful to escape justice. "The structure of Mexican law leaves a lot of ways out of the mousetrap," Mendoza said. "We have to redesign the trap."

Deschamps' opponents in the oil workers union also say his power exemplifies the need for reform of the laws governing labor organizations. Within a society famous for its corruption. Pemex, with its approximately USS40 billion in reported yearly revenue, long has been painted as a bastion of graft and nepotism. Local union leaders allegedly sell jobs to those aspiring to join the crew, higher-ups have been known to sell concessions to their own companies, and the structure of the union is neither transparent nor democratic.

While dissident movements within the oil workers union are calling for the removal of Deschamps, his hold on power in the nearly 90,000-member organization seems as firm as ever.

He became leader of the union in the mid-1990s, and he was re-elected to a second term in 2000 in elections of dubious legitimacy, according to dissident workers. "In the end we don't care if he is convicted on criminal charges or not." said Marcos Zenteno, an organizer in the National Democratic Alliance of Oil Workers. "We just want him out of office in the union."

According to union statutes, any national or local leader should be stripped of office if charged with a crime. But the current leadership, loyal to Deschamps, seems to have forgotten this clause, said Zenteno. The Democratic Alliance is organizing observers for upcoming elections in late December in hopes of drawing public attention to the organization's hermetic internal politics.

"Workers are afraid to vote against Deschamps." said Zenteno. "The votes aren't secret and they are afraid they could lose their jobs if they step out of line." But the dissident movement for a more open Pemex union is small, and Deschamps continues to receive support from union officials who hail him as an ideal leader. As the criminal case against Deschamps now stands; it may be some time before the trial is resolved.

His lawyers continue to file amparos against his arrest, and prosecutors admit the case is effectively "suspended" until Deschamps decides to meet judge Moya on his own free will.

Analysts speculate that in the end it will be difficult to pin charges on Deschamps or other powerful priistas who can call in polished lawyers.

But in the future it may not be so. While Fox's prosecutors may have bungled this case, new laws like the Freedom of Information Act and the Public Service Law, aimed at ending nepotism and creating a professional civil service, are laying the groundwork to prevent future scandals like Pemexgate. "Fox has made a lot of changes on the institutional level that will have far-reaching effects," said the CIDE's Ugalde. "These are what really matter because they will help Mexico build a less corrupt society."

Michael O'Boyle is an editor at a Mexico City English-language daily.
COPYRIGHT 2003 American Chamber of Commerce of Mexico A.C.
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Author:O'Boyle, Michael
Publication:Business Mexico
Geographic Code:1MEX
Date:Nov 1, 2003
Words:1695
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