Identifier
Created
Classification
Origin
09MONTERREY109
2009-03-17 15:21:00
UNCLASSIFIED
Consulate Monterrey
Cable title:  

SLOW PROGRESS ON ANTI-CORRUPTION INITIATIVES IN NUEVO LEON

Tags:  KCOR ECON PGOV MX 
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TO RUEHC/SECSTATE WASHDC PRIORITY 3581
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RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RHMFIUU/DEPT OF JUSTICE WASHINGTON DC
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UNCLAS SECTION 01 OF 04 MONTERREY 000109 

SIPDIS

E.O. 12958: N/A
TAGS: KCOR ECON PGOV MX
SUBJECT: SLOW PROGRESS ON ANTI-CORRUPTION INITIATIVES IN NUEVO LEON

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UNCLAS SECTION 01 OF 04 MONTERREY 000109

SIPDIS

E.O. 12958: N/A
TAGS: KCOR ECON PGOV MX
SUBJECT: SLOW PROGRESS ON ANTI-CORRUPTION INITIATIVES IN NUEVO LEON

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1. (SBU) Summary. There have been a number of allegations
of public corruption in Nuevo Leon - including bribes for
transit police and building inspectors and misuse of funds - but
these cases have resulted in few negatives consequences for
those named. The only exception occurred when prominent local
business associations complained of the `corruption without
limits' by Monterrey Mayor Adalberto Madero. Although Madero
was not charged with any crime, his candidacy for the PAN
nomination in the Nuevo Leon governor's race stalled. Nuevo
Leon does have new institutions designed to promote
accountability and transparency, but their reach is still
limited. To strengthen the rule of law, Post has sponsored a
speaker series to encourage anti-corruption efforts and
increased transparency in Nuevo Leon. End Summary.



Corruption Cases in Nuevo Leon




2. (SBU) Mexico clearly has a major problem with
corruption. Transparencia Mexicana (the Mexican chapter of
Transparency International) estimated that Mexicans paid 27
billion pesos (approximately US$2.7 billion at the time) in
bribes to all levels of government in 2007, accounting for 8% of
total income of the average Mexican, and 18% of the income of
the poorest Mexicans. The same study found that Nuevo Leon is
the eighth least corrupt state in Mexico, having improved from
2002 and 2005. In contrast, the Mexican NGO Center for Economic
Studies for the Private Sector (CEESP) found that Nuevo Leon was
the fifth most corrupt state in 2006 in terms of bribes required
to open a new business, since officials solicited a bribe 20% of
the time.




3. (SBU) Although rumors constantly swirl about possible
corruption, in three specific cases concrete evidence came to
light:





- In January 2007 the leading newspaper El Norte took
photographs of Monterrey city transit police receiving bribes of
up to 1,000 pesos (nearly $100 USD at the time) to allow drivers
to avoid drunk driving fines. Mayor Madero announced that
although over 200 transit police failed to pass the confidence
tests (20% of the force) he would only fire 52 officers. Later
on, he reinstated all but six officers and took no action
against top transit police officials. Working level transit

police complained to the newspaper that they had quotas of
kickbacks to pay their supervisors, but these allegations were
never investigated.

- In November 2007, Kena Yanez, the head of the Nuevo
Leon Youth Institute, was photographed and recorded conspiring
with another employee to falsify a contract. . The video
remains available on YouTube. Yanez was fired, but has not been
civilly or criminally charged. Indeed, she has smoothly
transitioned to a new career as an NGO consultant.

- In July 2008 El Norte published recorded
conversations by Monterrey officials in charge of parking meters
discussing a 30,000 pesos kickback (about $3,000 USD then).
Madero eventually dismissed 35 employees, including the head of
parking meter collections. Madero also decided to eliminate
parking meters from the streets of Monterrey, purportedly to
eliminate corruption; this move also deprived the city of
US$250, 000 each month in needed revenue.




4. (SBU) Comment. All of these cases were uncovered by
the press; public officials on their own initiative unearth
little, if any, wrongdoing. When the press broke the story,
the authorities made no apparent attempt to investigate whether
corruption was systemic, but simply fired the people directly
implicated. End Comment.



Case Study of Monterrey Mayor Madero




5. (SBU) When Monterrey Mayor Madero entered office in
2006, political insiders gossiped that all Monterrey city

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officials were expected to support `the project' to help Madero
become the PAN candidate for Governor of Nuevo Leon in 2009.
Madero reputedly hired 400 PAN activists in his administration
and installed his former chauffeur as his chief of staff. There
were many rumors that Madero was raising money from informal
businesses and siphoning off bribes from the transit police and
others. An El Norte poll in July 2008 found that 56% of
Monterrey residents thought that Madero was corrupt (31% did
not). Despite this, for most of 2008 Madero led the public
opinion polls among PAN aspirants by a wide margin and he
garnered strong support among party militants.




6. (SBU) Madero's luck turned bad in September 2008 when a
coalition of Mexican business associations publicly denounced
him for `corruption without limit.' The businessmen complained
that Madero's administration was charging `intolerable' bribes
for approval of requests for items such as construction permits.
Madero's public image suffered, his poll numbers fell, but he
still led the surveys. Many influential Panistas worried that
Madero would win either an open primary or a vote by PAN members
to become PAN's candidate for Governor. However, in February
2009 the PAN party backed away from prior promises to hold a
primary, and national PAN leadership handpicked federal Senator
Fernando Elizondo as the party's candidate for Governor of Nuevo
Leon. Senator Elizondo is generally viewed as a clean
politician. End Note.




7. (SBU) Comment. The Madero case represents perhaps the
only case in which a truly big fish who has suffered from
allegations of corruption. Two factors distinguish this case:
1) The allegations were made by influential businessmen, not
newspapers or NGOs; and 2) The businessmen did not denounce
corruption per se, but corruption without limit, implying that a
certain level of hanky-panky was acceptable. End Comment.



Do the Corruption Watchdogs Bark?




8. (U) The local press, led by the newspaper chain El
Norte is an effective watchdog on public corruption. As noted,
the press has conducted sting operations to catch public
servants such as transit police soliciting bribes. The media
also presses for transparency by requesting government
documents, pushing for stronger government power to investigate
misuse of funds, and checking whether politicians have followed
through on their promises to build effective anti-corruption
institutions.




9. (SBU) Nuevo Leon has several NGOs dedicated to
transparency, including Red Civica, Citizens against Corruption,
a local university, Renace and Vertebra. Post gathered the NGO
organizations together to develop a speaker series on practices
to control corruption. Our impression is that the NGOs are
sincere, reasonably well informed, but most have few members
beyond the heads of the NGOs (Renace is the exception). Post's
PAS section sponsored the initial session, and aside from the
universities, the NGOs were not able to bring many people to the
presentations. Post also invited many business associations,
only one of which sent a representative. In short, the NGOs
need to substantially increase their resources and membership to
effectively pressure for change.






10. (SBU) At the end of the Vicente Fox presidency, the
Monterrey chapter of the business association COPARMEX, working
with the administration of Nuevo Leon Governor Gonzalez Paras
and the University of Monterrey, persuaded UN anti-corruption
researchers to transfer the focus of one of their lagging
projects to the state of Nuevo Leon. Manuel Zambrano, the
President of COPARMEX Nuevo Leon, admitted to conoff that the UN
effort had bogged down in Monterrey as well, but noted that work
on several worthwhile initiatives - such as the idea of
establishing an independent prosecutor solely dedicated to
anti-corruption and formulating transparency indicators - would
continue under the aegis of the state's citizens council on
public security.



MONTERREY 00000109 003.2 OF 004




11. (SBU) In 2008 Nuevo Leon established a new state audit
commission, replacing a politicized office which had been under
the direct control of the state legislature. Sergio Marenco
Sanchez became Nuevo Leon's auditor, with an eight year term.
Marenco Sanchez had substantial experience as an accountant in
large Mexican companies and appears to be qualified. Marenco
Sanchez described his office as similar to the U.S. General
Accounting Office, because it examines the use of state and
municipal funds and reports its findings to the state
legislature. Marenco Sanchez plans to hire 150 auditors for his
office, and he emphasized his independence from the political
process -- since he can only be dismissed by a supermajority of
75% of the state legislators. The auditors are now reviewing
2008 spending by the state and municipalities.




12. (SBU) Although the new state auditor provides a new tool
against public corruption, there are several key limitations.
First, the auditors look at public spending, not bribery, so it
is not in their purview to examine if public officials have been
bribed. In Nuevo Leon state and city controllers are in charge
of investigations into bribery, so if a mayor receives bribes,
the mayor's own controller would be in charge of the
investigation. Second, the state auditor only reports his
findings to the legislature, not publicly. Nuevo Leon's
legislature passed on the first reading of a reform which would
allow the results of the audits to be made public, but so far
the local PAN party has blocked the required second reading of
the law and it has not come into force. Note. PAN
gubernatorial candidate Elizondo has supported the reform. End
Note. Since the state audit findings are confidential, Morenco
Sanchez could not discuss whether the auditor has been
investigating any specific cases.




13. (U) According to a 2008 study by Transparency and
Availability of Fiscal Information (ITDIF in Spanish),Nuevo
Leon ranked thirteenth (out of 31) in transparency among Mexican
states. That could improve with the 2008 inauguration of the
Nuevo Leon Commission for Transparency and Access to Public
Information. The Transparency Commission requires that state
and municipal governments publish information on the internet
and respond to written requests for information. Commissioners
have five year terms of office and can only be removed for
cause.




14. (SBU) According to Commission President Guillermo
Mijares Torres, students, businessmen, media and neighbors
(upset with nearby construction projects) have most frequently
requested public information. If the government does not
produce the information, the requestor makes a written request,
and the Commission renders a decision within three weeks.
Commissioner Mijares admits that they need to change the
bureaucratic culture so that government willingly shares
information He contended that the Commission finds for the
requesting citizen 98% of the time. The Commission also has the
power to fine recalcitrant bureaucrats.




15. (SBU) Several journalists complain that Nuevo Leon is
not fully living up to the law. El Norte editor and law
professor Miguel Trevino complained that his newspaper must
always make written requests for information and pay for them.
Note. Under the law, requestors do not have to pay for
information but they do need to pay for copies. End Note.
Several other journalists have pointed out that the state and
municipal institutions have not yet published on the internet
all the information required. However, the Transparency
Commission appears to be a move in the right direction. El
Norte editor Trevino thinks that Nuevo Leon's institutions are
generally adequate, but there is a vast gap between the legal
requirements and social norms, where corruption is winked at and
accepted. He argues that corruption must become socially
unacceptable before the institutions can work properly. Trevino
called on the NGOs to make corruption a key issue in the 2009
political campaigns.



Comment




16. (SBU) Comment. Monterrey is a business town, but

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businessmen have rarely complained to poloff about corruption,
seeing it as an intractable but manageable problem. However,
the influx of drug cartel money, combined with a permissive
attitude toward bribery and lax enforcement, has created a
deadly brew. While Nuevo Leon has several of the key tools in
place to effectively combat corruption, such as an aggressive
media, the transparency law, and a new state auditor, the press
and the NGO community must raise public awareness of the true
costs of corruption to change public attitudes. To promote the
rule of law, Post hosted the anti-corruption NGOs in several
strategy sessions and has planned a speaker series increase
public awareness. End Comment.
WILLIAMSON