Follow the Money: Understanding the 2012 Mexican Electoral Fraud

Co-Authored by Kurt W. Hackbarth

As Bob Woodward and Carl Bernstein discovered when investigating the Watergate scandal in the 1970's, following the money that was spent on the cover-up proved to be the key ingredient in bringing down the Nixon Administration.   That was the sage advice they received from "Deep Throat", the anonymous insider who steered them toward the essential evidence critical for the impeachment of Richard Nixon. Clearly, the wisdom of that advice has not been lost upon Andres Manuel Lopez Obrador ("AMLO' as he known by his initials), the candidate who allegedly came in second in Mexico's July 1 election, as well as upon the leaders of his three-party progressive coalition.  They have spared no effort in tracking down the murky and complicated flow of money to Enrique Pena Nieto's presidential campaign, which massively exceeded the maximum 336 million peso ($26 million US) legal spending limit for each of the presidential candidates.  It was Enrique Pena Nieto who supposedly "won" that election with a more than 6 % margin over Lopez Obrador. HOW that "victory" was attained is what is now being so thoroughly scrutinized. 

It is AMLO's contention that at least 4.6 billion pesos ($368 million US), well over 1,000% above the campaign spending limit, were used by the Pena Nieto campaign to influence and buy votes. It is this contention that forms the basis for his petition to invalidate the July 1 presidential election, which he claims was in violation of Article 41 of the Mexican Constitution which requires elections to be "free and authentic" with a level playing field for each of the political parties and a preponderance of public funding over private. Lopez Obrador's petition is now pending with the Federal Electoral Tribunal which has until September 6 to make its final ruling; i.e., either Enrique Pena Nieto will be declared Mexico's official president-elect or the election will be invalidated, an interim president will be named by Congress and new elections will be called within eighteen months.

Until Vicente Fox's victory in 2000, Pena Nieto's Institutional Revolutionary Party (PRI) had ruled Mexico with an iron hand for more than 70 years. During that time, it had become proficient in the use of creative vote-buying schemes to perpetuate itself in power, for example, providing vulnerable and predominantly-poor voters with dispensas - packages of food staples -- clothing, household items or building supplies, in exchange for voting for PRI candidates.   Although such schemes were utilized once again in the 2012 election, often coupled with outright payments in cash or even in farm animals, this time the schemes went well beyond such " bush league" tactics. 

Using modern technology to its fullest, the PRI flooded potential voters with thousands of pre-paid debit cards issued by the supermarket chain Soriana, the Monex Financial Group, as well as has recently been discovered, the banks Banamex and Bancomer and Walmart Mexico, the latter currently under investigation by Mexican and US authorities for tax evasion, money laundering and bribery . In deference to the mother-of-all-scandals Watergate, these illegal transactions soon became known in the Mexican media as "Sorianagate ' and "Monexgate ' . This is not to mention the enormous number of pre-paid telephone cards with Enrique Pena Nieto's picture imprinted on them, once again distributed in exchange for a commitment to vote in his favor. All of these efforts were in clear violation of Mexico's Federal Penal Code, whose Article 403 purportedly punishes vote buying with up to three years in prison.

Before and after the election, Proceso , one of the nation's few sources of independent investigative journalism, ran a series of articles outlining the PRI money flow. From these articles, it became clear that considerable monies were triangulated into the Pena Nieto campaign from a variety of suspicious sources, some possibly illicit. State governments ruled by the PRI including the State of Mexico, Yucatan, Veracruz and Zacatecas provided a major source of PRI campaign funding.  The funds were reportedly funneled through a series of questionable front companies for Monex, such as the wine-importing company Efra, which reportedly paid for some 91 million pesos worth of Monex cards, the company Atama (66.3 million pesos more in pre-paid cards), and Inizzio (60 million pesos).

To demonstrate how complicated and convoluted such financial transactions appear to have been, No. 1866 of Proceso provides a two-page graph of The Monex Financial Group . With a series of dotted lines and arrows, this graph shows how money flowed from one front company (six in all) to another and then on to the PRI. Curiously, the same names keep popping up as heads of the companies, such as the father-and-son team Gabino and Emilio Fraga, longtime PRI operatives, and Jose Luis Lozada Neyra, owner of both Inizzio and Atama. In all, Lozada Neyra is the owner of 24 companies created over a 12-year period (Proceso 1866, pp.12-13).

In addition to these companies, a number of suspicious bank accounts have turned up, connected in one way or another with the PRI, where during the three months of the campaign, enormous quantities of monies were mysteriously deposited and withdrawn, often on the same day. One of the most controversial of these accounts was the one set up in Scotiabank by Luis Videgaray, Pena Nieto's campaign manager and former Finance Secretary for the State of Mexico during Pena Nieto's term as governor,.  The bank account appears in both his name and that of the State of Mexico.  It is from this account that Ricardo Monreal, Lopez Obrador's campaign manager, has accused the PRI of triangulating over 8 billion, 681 million pesos (over $690 million US) into the Pena Nieto campaign, an allegation initially denied with vehemence by the PRI, which then proceeded to walk back step by step, first acknowledging that the account did exist and then admitting that Videgaray may indeed have had a hand in managing it. For his part, Videgaray, poised for a high-profile role in any future Pena Nieto government, has responded to the allegation by suing Monreal for defamation of character, a lawsuit Monreal publicly welcomes (Proceso 1866, pp.16-19).

In the previous issue (1865) of Proceso, reporters Jesusa Cervantes and Jose Gil Olmos contend that the Pena Nieto campaign's financial operation had strong foreign and overseas ties in the US, Spain, Italy and Israel.  The way that money was deposited and withdrawn in these countries had disturbing similarities to the money laundering transactions utilized by organized crime. One way or another, such monies ended up as deposits in Monex accounts, which then became accessible for use by the PRI (Proceso 1865, pp.7-8).

Toward the end of the campaign, another curious revelation became public.  According to the Mexican-American businessman from California, Jose Luis Ponce de Aquino, in October of 2011 the Pena Nieto campaign hired his company to promote its candidate in the United States at a cost of US $56 million. The agreement was that that money would be deposited, again, in Monex as well as in the Bank Mifel. For unexplained reasons, those deposits were never made.  The campaign's failure to honor its financial commitment has resulted in a lawsuit that Ponce de Aquino has filed against Pena Nieto and his campaign in a California court of law. The Pena Nieto campaign has responded by downplaying that lawsuit, characterizing it as "extortion". Although understandably bitter toward his erstwhile employers, Ponce de Aquino claims that PRI operatives informed him that the money for his US $56 million fee would come from Italy, Israel and either Portugal or Brazil. He has publicly stated that he strongly suspects that organized crime was involved (Ibid. p.8). 

Further fueling suspicions of a PRI-drug trafficking nexus was the recent arrest in Spain of a PRI campaign operative from the State of Sinaloa, Rafael Humberto Celaya, along with three other alleged members of the Sinaloa drug cartel. On Celaya's Facebook page was a picture of him with none other than Pena Nieto himself. As if that were not enough, a suspicious helicopter crash on July 28 claimed the life of Juan Armando Hinojosa Garcia, close friend of Pena Nieto, son of the owner of the Higa Group, beneficiary of lavish infrastructure contracts from Pena Nieto in the State of Mexico; generous donor of planes for the PRI campaign and part of the campaign's intricate financing schemes.          

Even though the PRI's convoluted financial transactions are now becoming clearer, there is still a considerable amount of intensive investigation that needs to happen.  Every bit of evidence that has emerged about the money laundering and triangulation of funds thus far has been uncovered by AMLO's progressive coalition, the two independent publications, Proceso magazine and La Jornada newspaper, and/or by resourceful investigative journalists such as Carmen Aristegui.  What, if anything, the Federal Electoral Institute and the Electoral Tribunal have discovered on these critical matters remains a mystery. 

AMLO's progressive coalition has requested a postponement of the September 6 deadline for an election ruling so that there will be sufficient time for a full investigation to be carried out, but with a panel of conservative jurists who are determined to rule through a strict constructionist straitjacket, it is unlikely that either that request or any other will be granted, or that the election itself will be invalidated. Despite the unending stream of irregularities that have been and continue to be uncovered, the Tribunal is likely to rule that said irregularities simply were not quantifiably sufficient to counteract the three-million vote margin separating the two top candidates. What is most likely is that it will slap the PRI with a large fine for overspending, chastise it for its excesses and let it go at that.    Enrique Pena Nieto will then be officially anointed as Mexico's new President-Elect. 

William Stone's bio can be accessed by going to About the Author.   Kurt Hackbarth's bio is as follows:   Kurt Hackbarth is an independent writer, translator and author of the plays La (medio) diezmada and El ostrakon.  His book Interrumpimos este programa will be published this fall by Ficticia Publishers.