How Should Mexico Fight Corruption?

One of the major areas targeted for reform in the Mexican government’s Pact for Mexico is “Transparency, Accountability, and the Fight Against Corruption” (section 4 of the Pact). The reforms in this area foresee the following:

  1. greater accountability of government spending at all levels, through common rules/procedures and ensuring citizens have access to spending data;
  2. greater power and autonomy to the Federal Institute for Access to Public Information (IFAI) and similar state-level bodies; and
  3. the creation of a national anticorruption system through the establishment of a National Anticorruption Commission and state-level commissions, and the creation of a National Council for Public Ethics to channel anticorruption efforts from all areas of society.

Although all three points are interesting, the national anticorruption system is perhaps the most intriguing proposal, and has the greatest potential to reshape Mexican society and boost the country’s modernization efforts. Below are some reasons why Mexico’s approach to fighting corruption is so pivotal to its overall reform effort.

Scope of the problem

Most domestic and foreign observers acknowledge that corruption is a major problem in Mexico. In Transparency International’s recently-released Global Corruption Barometer – a survey of ordinary people on their experiences with and views on corruption – Mexicans overwhelmingly stated that corruption has increased a lot (52 percent) or a little (19 percent) in the past two years. Moreover, Mexicans almost unanimously agreed that the three pillars of government are corrupt: legislature (83 percent), judiciary (80 percent), and executive branch/civil service (87 percent). The only institutions more widely-viewed as corrupt were political parties (91 percent – one of the worst results for political parties globally). 33 percent of Mexicans reported having paid a bribe to one of eight categories of officials over the past 12 months, which puts Mexico on par with Kazakhstan, Pakistan, and Nepal. Moreover, Transparencia Mexicana – Transparency International’s Mexican affiliate – recently found that from 2003-10, the number of acts of corruption doubled and the total cost – i.e., amount spent on bribes – trebled.

Bribe demands from officials also afflict Mexican enterprises. Indeed, in a 2010 World Bank Enterprise Survey, 50 percent of Mexican companies identified corruption as a “major constraint” in the Mexican business environment (up from 48 percent in 2006). By contrast, 40 percent of firms in Latin American/Caribbean and 36 percent of firms globally identified corruption as a major constraint in 2010. 18 percent of Mexican firms reported experiencing at least one bribe request in 2010 (up from 14 percent in 2006). Interestingly, the bribery depth – proportion of public transactions where a gift or informal payment was requested – dropped to 10 percent (versus 14 percent in 2006). And although Mexico’s bribery depth level is greater than the rest of Latin America (7 percent), it is quite lower than the world average of 16 percent.

The most encouraging sign from the data is that Mexican citizens and enterprises still identify corruption as a major burden and are supportive of anticorruption campaigns. 81 percent of Mexicans surveyed this year agreed/strongly agreed that “ordinary people can make a difference in the fight against corruption.”

Existing legal framework

The pervasiveness and persistence of corruption as a major problem in Mexico is not a reflection of a deficient legal framework. Mexico already has many laws in place to address all forms of corruption, including passive/active bribery, extortion, foreign bribery, use of public resources for illicit enrichment, and money laundering. Indeed, Global Integrity gave Mexico’s anticorruption legislative framework an impressive score of 100/100. Rather, Mexico’s failure lies in the area of implementation, where it scores a dismal 52/100. Several of Mexico’s shortcomings on implementation related to the existing anticorruption agency (Secretaria de la Funcion Publica), in particular:

  • both in practice and in law, the agency is not protected from political interference due to its subordinate status vis-a-vis the President;
  • appointments to the agency are not always on a professional basis and its staff may lack competence to fulfill its mandate;
  • the agency has not, in practice, been able to successfully carry out its mandate to reduce corruption;
  • the agency may initiate investigations, but is limited in its effectiveness;
  • the agency’s response to formal complaints may be calibrated to political considerations; and
  • citizens only feel safe in approaching the agency with ‘difficult’ corruption issues that implicate powerful interests.

Proposals on the table

In November 2012, Pres. Peña submitted a proposal to create a National Anticorruption Commission to the Senate. The proposal was jointly sponsored by Peña’s party – PRI – the PVEM, the Mexican Green Party. At the time, observers identified five central features to Peña’s proposal:

  1. Investigations – the council would be empowered to initiate investigations aimed at all levels of the government upon receiving information from other state agencies or complaints from citizens
  2. Privacy – the council would not be limited for reasons of banking, fiduciary, or tax secrecy. Thus, the council would be empowered to explore money laundering cases. The council would be empowered to investigate both officials and private citizens
  3. Jurisdiction – the council would be empowered to take up cases from the state or municipal level that are of national relevance. Also, the states and the Federal District will be able to establish their own specialized anticorruption commissions, with their own autonomy and legal identity
  4. Public Ethics – the reform seeks to promote actions and programs of a preventative character, and to promote ethics and honesty in public service. Specifically, the reform would establish a National Council for Public Ethics, which will be formed by representatives from all levels of government and citizens, in order to guide actions that contribute to greater transparency throughout the government
  5. Housekeeping – if the commission is created, the Ministry of Public Administration (Secreteria de la Funcion Publica) would disappear, with some of its functions going to the new commission and some going to the Ministry of Finance and Public Credit (Secretaria de Hacienda y Credito Publico).

For their part, the two other major Mexican political parties made competing proposals to fulfill the Pact for Mexico obligations related to Transparency, Accountability, and the Fight Against Corruption:

  • National Action Party (PAN) – a new, unspecified office responsible for prosecuting crimes involving money laundering and corruption, based on the work of the Ministry of Public Administration. Also proposes the creation of a National Register for the Declaration of Financial Condition of Public Servants. Does not envision the creation of an entirely new anticorruption commission.
  • Party of the Democratic Revolution (PRD) – creation of an agency that will only address cases referred by the Supreme Auditor of the Federation; does not envision mechanisms for responding to other internal complaints or complaints from citizens. Proposes the creation of a legal framework that defines corruption as a crime and seeks to harmonize regulations at all levels of government.

Reactions to Pres. Peña’s proposal were mixed, at best. For example, the PRD claimed that the PRI commission lacked ‘teeth’ and some experts believed that the commission was mostly a cosmetic measure. But other observers claimed that the commission’s ability to investigate and levy administrative sanctions demonstrated that it did not lack teeth, even if the commission would not have the ability to hand down more serious penalties in the case of criminal behavior. Another criticism of Peña’s proposal was that the five commission members would all be nominated by the President, with 2/3 approval required from the Senate, which could undermine their independence. Also, the commission would only have the ability administratively sanction public servants, not private individuals.

Status of the reform

The disagreements over the form the commission would take, as well as over other aspects of the reform, ultimately derailed Peña’s hopes of passing his proposal quickly. Indeed, by early 2013, it was clear that the soonest the transparency/accountability/corruption reform could pass would be during the legislative session from September 1 – December 15, 2013. Under this scenario, the reform would be addressed during a special session from May-August 2013. But now even this timeline is in doubt as disagreements between the PRI and PAN have blocked the reform from progressing.

Anticorruption agency characteristics

There has been a lot of research into the work of specialized anticorruption agencies (e.g., see here, here, here, and here). To its credit, Peña’s proposal explicitly cites some of this research in explaining the reasoning behind its features. The research identifies a number of features that the ideal anticorruption agency should possess:

  • Distinctiveness – agency should be exclusively focused on corruption
  • Preventive/Repressive Control – agency should focus on prevention as well as investigation/prosecution
  • Durability – agency should not have an occasional or temporary existence
  • Information Clearinghouse – agency should centralize functions of collecting, storing, processing, and diffusing information related to corruption
  • Interface – agency should articulate related measures taken by other enforcement agencies
  • Research/Knowledge Forum – agency should promote research and coordinate participation in forums and international events
  • Rule of Law – agency must be accountable to one of three branches of government
  • Recognized – agency must be known by and accessible to general public

Another key element to the success of an anticorruption agency is political, financial, and bureaucratic autonomy/independence. Indeed, without independence it seems that an anticorruption agency will inevitably fail to fulfill its mandate, if only due to the perception of bias within the agency.

Benchmarking Mexico’s efforts

Based on the criteria described above, Peña’s proposed anticorruption commission would seem to be a good start towards establishing an effective, specialized anticorruption agency. Isolating anticorruption efforts in a single body is justified because of the scale of the problem in Mexico. Moreover, Peña’s commission would have a mandate to engage in preventive/repressive control and information sharing/promotion. The commission would also be answerable to the President, although its five members would have to be ratified by the Senate.

The most concrete concern regarding Peña’s proposal relates to independence, particularly because the commission would be subordinate to the president. Peña could address this concern in various ways. For example, ensuring that commission activities could be reviewed and overturned by the judiciary would add an additional layer of oversight. Also, Peña could include a requirement that commission members be drawn from all parties with representation in the Mexican legislature – adding and reducing the number of members as necessary – similar to the U.S. Federal Election Commission.

Most important, Peña will need to find a way to craft a reform that enjoys respectable levels of support from the major political parties, or else the political will and public perception of the commission will undermine its efforts.

This entry was posted in corruption, legislation, money laundering, Pact for Mexico, reform. Bookmark the permalink.

3 Responses to How Should Mexico Fight Corruption?

  1. Pingback: Mexico’s New Anticorruption Initiative – Facelift or Reconstructive Surgery? | The Mexico Monitor

  2. Pingback: Anticorruption Update – Stalled Reform, Policing PEMEX/CFE | The Mexico Monitor

  3. Pingback: Anticorruption Update – PAN Unveils its Initiative, Finish Line in Sight | The Mexico Monitor

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