By RICARDO CASTILLO
The financial-political scandal in Mexico that is threatening to become a perfect storm is nothing new. It’s been in the making for 28 years now, but in the bat of an eye this week, two arrest warrants were issued by the Fiscal Attorney General of the Republic. That’s what this story is about.
On Tuesday, May 28, Mexican steel tycoon Alonso Ancira Elizondo landed in a private jet at Palma de Mallorca island in Spain and was arrested on arrival.
Mexican authorities issued the arrest warrant for his detention through the international criminal police agency Interpol, whose agents nabbed and handcuffed Ancira. He immediately stated through his defense counsel that he does not want to be extradited to Mexico. The Mexican Fiscal Attorney General has 40 days in which to file extradition documents. “This is a political vendetta orchestrated by President (Andrés Manuel) López Obrador,” Ancira said.
Ancira Elizondo is chairman of the board (owner, some claim) of the giant steel manufacturing company Altos Hornos de Mexico (AHMSA), which employs over 20,000 people in Monclova in the central Mexican state of Coahuila. (Altos Hornos means blast furnaces in English. AHMSA processes one-sixth of the national steel production.)
And in Mexico, on Wednesday, May 29, authorities who had issued an arrest warrant for former Pemex director Emilio Lozoya Austin had to stop looking for him since his defense lawyer, Javier Coello Trejo, managed to get him a temporary protection from arrest injunction (amparo) against the warrant from a federal judge. The warrant has been put on hold until the defense counsel studies the charges against Lozoya Austin. That “temporary amparo” will be up for revision on Tuesday, June 4. Mexicans will then find out what the exact charges against Ancira and Lozoya are. But for now Lozoya is considered “on the lam.”
On Wednesday, May 29, President López Obrador (AMLO) repeated a statement he had made the previous week that “we said that no legal process was going to be stopped.” He said that the investigation involving illegal money transfers between Lozoya and Ancira was opened under the aegis of former President Enrique Peña Nieto. “This has been on course since the past administration,” he said. “It is not an act of vengeance by us, but we will not cover up anything.”
Lozoya in the past has been accused in Brazil and investigated in Mexico. No charges, however, were filed during the Peña Nieto administration, which ended on Nov. 30, 2018. But Lozoya is suspect of having been bribed by Brazilian construction contractor company Odebrecht with $10 million, half of which, many suspect, was spent in the Peña Nieto 2012 presidential campaign. Lozoya at Pemex awarded Odebrecht juicy contracts. But this is not what the arrest warrant is about.
At the heart of the arrest warrants for Ancira and Lozoya is a deal for a urea (a substance made from ammonia, used in fertilizers, animal feed and in the plastics industry) plant named Agro Nitrogenados, located in Gulf of Mexico port of Pajaritos in Veracruz. Back in 2014, Pemex, under the directorate of Emilio Lozoya Austin, purchased the company from Ancira Elizondo for $475 million.
From the start, that purchase stirred scandal. First, Agro Nitrogenados originally belonged to Pemex, which back in 1991 still operated four fertilizer-producing companies. The plant was divested and bought by AHMSA through a deal between then-Mexican President Carlos Salinas de Gortari and then-AHMSA CEO Alonso Ancira. It was a money-losing company Ancira got for pennies and it came with the financial rescue of AHMSA, then also bankrupt.
This has led to rumors that AHMSA is actually owned by Salinas de Gortari and that Ancira is only a straw man. Please note, this is hearsay, not factual nor verifiable gossip. But these claims are very much in the political air. And they are a good reason why AMLO is washing his hands in the case, since during his campaign he denounced the “crooked purchase of Agro Nitrogenados” by Pemex –- namely Lozoya –- “for $500 million when it wasn’t worth $50.”
But what is a fact is that AHMSA was bailed out under the bankrupt banks and companies salvaging package known in the 1990’s as Fobaproa. AHMSA still owes the government 219 million pesos (quoted back in 1996, at four pesos per dollar).
In any case, Agro Nitrogenados went out of business in 1999. Operational facilities were shut down, and, since then until 2014, only maintenance crews were at its facilities, which includes the main pier at Pajaritos port.
The 2014 “repurchase” of Agro Nitrogenados did not go unnoticed and was criticized in financial circles right from the start. But the fact remains that it was a deal made between Lozoya and Ancira. “Lozoya put up the money and Ancira pocketed it,” a pundit wrote.
Since then, according to the leading investigator of the Treasury Secretariat’s Financial Intelligence Unit (UIF), Santiago Nieto, since this transaction was carried out, AHMSA has made a series of “suspicious money transfers” to Lozoya’s related accounts in the fiscal haven of the Virgin Islands in the name of Lozoya’s wife and sister.
Lozoya’s defense lawyer, Javier Coello, said that his client could not have possibly authorized the purchase of Agro Nitrogenados alone since only the Pemex Board of Directors could have authorized such an acquisition.
If that is the case, at the time the purchase was made in 2014, the Pemex Board of Directors was as follows: The president, Energy Secretary Pedro Joaquin Coldwell, right along with then-Treasury and Economy Secretaries Luis Videgaray and Ildefonso Guajardo (who later led the free trade agreement negotiations with Canada and the United States to salvage NAFTA), plus many other high-level officials in the Peña Nieto administration. The list is a lot longer, but still, the only culprit on sight is none other than Emilio Lozoya Austin, and the already tanked Alonso Ancira Elizondo.
The question now is: How far will this case go? Will it end up as the perfect storm that will finish sinking the Institutional Revolutionary Party’s (PRI) already-wrecked ship once valiantly commanded by former President Peña Nieto?
In other words, will the dung hit the political fan?