Mexico seeks a system to stamp out corruption

"It's always difficult to deal with government," bemoans one insurance broker in the northern Mexican city of Monterrey. "Someone always tries to ask you for a bribe."

Corruption - once dismissed by President Enrique Pena Nieto as simply a "cultural" phenomenon - has become so commonplace in Mexico that businessmen are blase. One describes routinely making political campaign contributions that are far beyond what is allowed: "Everyone has to. It's expected."

He adds: "I've lost count of the number of times that state officials have come to our plant demanding permits for procedures that we already have permits for. All they want is a bribe, which we don't pay, because I know the governor. But not every Mexican business has the access that I do."

While greasing the ever squeaky wheels of Mexican bureaucracy has long been seen as just the way things work in the country, public patience has snapped in recent months. A series of conflict of interest scandals involving houses bought by the president, his wife and his finance minister from prominent contractors showered with lucrative official contracts have brought matters to a head.

A new "anti-corruption system" based on new laws, tougher requirements and penalties for public servants as well as new sanctions for companies on the other side of the bribe has been approved by Mexico's Congress.

The reforms require constitutional changes and so must now be ratified by state legislatures before being signed into law by the president. Congress will then have to draft and ratify implementing laws, which means that the system will not be fully operational for many months.

It is a change of tack for Mexico - a co-ordinated attempt to strengthen institutions and apply checks and balances across the board, rather than appointing an anti-corruption "tsar" to swoop on high-profile cases but perhaps be less willing to expose the government to the same scrutiny as political adversaries.

Now the hard graft, as it were, starts. "This is the work of a decade," says Eduardo Bohorquez, head of Mexico's chapter of Transparency International, an international monitor which ranks Latin America's second-biggest economy 103rd out of 175 countries in its latest annual corruption perception index.

Mexico faces the challenge of fighting what some have dubbed the "four Is": impunity, illegality, injustice and inequality.

One North American executive's experience of dealing with shady officials and an unscrupulous judiciary has convinced him that "things are getting worse. That is the feeling around town in the business community here".

Indeed, he is dubious about the need for a new anti-corruption system at all. "Why change the laws when the real issue here is political will?" he asks.

Many Mexicans question whether such a thing exists, or whether Mr Pena Nieto will face a proper inquiry into the so-called "White House" scandal involving a mansion his wife was buying from a favoured contractor, since a trusted official is investigating and the president has already insisted there was no conflict of interest.

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Even though the affair plunged the government into a profound credibility crisis from which it is still struggling to emerge, one senior government official recently rejected the first lady's need to divulge details.

Meanwhile, scandals hit the headlines almost daily. Last month, a government official resigned after an outcry over his use of an official helicopter to take his family to the airport for a holiday. The governor of the northern state of Sonora and a gubernatorial candidate in elections in June are alleged to have been granted corporate tax breaks worth tens of millions of dollars, something state officials have denied.

Mexico ?como vamos? (How are we doing, Mexico?), and other civil society groups, have devised a ticking "anti-corruptometer" to time just how long it will take for state legislatures to approve the anti-corruption system.

"I'm cautiously optimistic," says Marco Fernandez, a professor at the Tec de Monterrey's School of Government and a researcher at Mexico Evalua, an NGO.

The government is upbeat that steps such as requiring officials to submit conflict of interest and income statements (though not necessarily to make them public) will deter dodgy deals. While the system is less strict than the US Foreign Corrupt Practices Act or the UK Bribery Act, companies will face more accountability.

"There's no doubt about it, this is a step in the right direction," Mr Fernandez says. "But there is still a long way to go . . . there will clearly be resistance from the political class. It will be a very big battle ahead."

Additional reporting by John Paul Rathbone

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