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The 2015 internal audit, which revealed the participation of ex-president Fox in acts of corruption, disappeared from the Secretariat of Public Service (Secretaría de la Función Pública). Roberto Muñoz Leos, the auditor in charge, points out during the interview that the ex-governor directly ordered anomalous actions. The archive made up of 365 pages and of which Contralínea has a copy, documented influence peddling, direct awards, subcontracting, advanced payments, overpricing, noncompliances, duplication of agreements and triangulation of public spending during the remodeling of Los Pinos. The loss of this dossier affects the historical memory of Mexico and represents a violation of human rights, explain experts in the law.

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The Secretariat of Public Service (SFP for its Spanish acronym) lost from its historical archive the 2015 audit which documented the participation of former president Vicente Fox Quesada in corrupt acts occurred at the beginning of his government during the remodeling of the residence Los Pinos. This renewing involved residence Miguel Alemán, cabins 1 and 2, exterior works and the annexed house, for a total cost for the public treasury of over 61 million Mexican pesos.

In response to the request for information No. 0002700068419, made by Contralínea, the institution headed by Dr. Irma Eréndira Sandoval admits that ‘after the search procedure in its physical and electronic files’, neither the Government Audit Unit (Unidad de Auditoría Gubernamental), nor the Public Works Control and Audit Unit (Unidad de Control y Auditoría a Obra Pública), nor the Directorate General for External Audits (Dirección General de Auditorías Externas), nor the Internal Control Organ of the Presidency of the Republic (Órgano Interno de Control en la Presidencia de la República)‘have documents providing a response to such a request’.

According to her argument, the absence of the file is due to the fact that ‘there has been no audit carried out by the Secretariat of Public Service regarding contracts AD009-01, AD267-00, and AD268-00 for the remodeling of Los Pinos during Vicente Fox’s six-year presidential term’.

However, this audit was carried out, and this weekly paper retains a copy of the exhaustive file. In its 365 pages, it reports various anomalies such as direct awarding; influence peddling for the benefit of architect Humberto Artigas – Fox’s friend; subcontracting; advanced payments – despite contracts had not been concluded yet; overpricing, noncompliance and duplication of agreements; triangulation of public spending; lack of proper delivery; delivered objects not required; and opacity in the acquisition of equipment.

In an interview with Contralínea, public accountant Roberto Muñez Leos- the leader of the team of auditors who inspected the remodeling works- explains that this thorough investigation was carried out in 5 working days due to the pressures faced by the then Secretary of Comptrollership and Administrative Development (Secretaría de Contraloría y Desarrollo Administrativo – Secodam), today Secretariat of Public Service, headed by Francisco Barrio Terrazas.

‘We conducted that audit at the very beginning of Fox’s six-year term, and if the power of the President was great, Marta’s was even greater,’ says the auditor with over thirty years of experience in the areas of supervision of public service.

Muñoz Leos, who during Fox’s six-year term served as director general of Government Auditing of the Secodam, reveals how the former president directly participated in the anomalies: ‘Fox claims that it was the first issue that was used to hit him. Nonetheless, it was not him to be affected, but his administration because the person [Carlos A Rojas Magnon] he named to manage [the remodeling works] started by appointing himself, a proof that he did not know anything about this issue, but still, he was the boss. This kind of things happens very often.

The former Comptroller of the extinct Conasupo (a position from which he documented the irregularities committed by Raúl Salinas de Gortari), Bancomext and Conapred – to mention only part of his career path – recalls that to carry out this audit ‘facts were reconstructed’ starting from the interrogations. Indeed, all the involved persons, including bricklayers, were questioned as the PAN government had no accounting records. ‘There was no way to review documentation because there were no available records for many things.’

Interviews revealed the active role of the first president of Mexico coming from the National Action Party (PAN) in the decisions that led to acts of corruption. ‘We asked the gentlemen involved in the construction work why they were participating in that, and they answered: ‘Because the boss asked me so.’ The boss who [were asking the auditors], “the boss Fox” [bricklayers were answering]. Everyone was giving instructions, and everyone was throwing money away. They splashed out much money’.

In total, the renewing of the residence Miguel Alemán, cabins 1 and 2, exterior works and the annexed house amounted to 61,895,000 Mexican pesos, reports the audit file.

The public service auditing specialist explains that ‘as an auditor, one must gather sufficient and relevant documentation to prove what one says: it was not well done as they did not do any tender; this is expensive because market prices are these… Everything has to be proven because the audit is not what one may know, but what one can verify. One may have ten times more information but [that knowledge] is useless if it cannot be proven. That is the limit of auditing: it is complicated to achieve anything concrete if there is no documentary check’.

Therefore, the large file does not include, for instance, that the Mexican Presidency got involved in the smuggling of goods. ‘They purchased materials in the U.S.; furniture was made as well in the U.S. All these were smuggled for Los Pinos, which is a double embarrassment, or even worse. The refrigerators, everything was smuggled goods coming from the other side [of the northern border], explains in detail, Mr. Muños Leos.

On the other hand, the final audit includes the participation of two men very close to former-President Fox: Humberto Artigas y Carlos A. Rojas Magnon.

On these men, the public accountant explains: ‘It turns out that Mr. Carlos Rojas Magnon appointed himself: ‘I am the head of the administration, my position is as an undersecretary, and I sign and name myself,’ with an astonishing easiness. When all this began [the audit], the first thing we did was to see what was [recorded] in Compranet. There were towels of 11 thousand Mexican pesos; whiskey bottles of 8 thousand Mexican pesos. Also, we are talking about the peso value of that time that is like the triple of its value now; there was this kind of things, but with the news that it was published that they bought these items for those prices, but actually they had not purchased them, they had just received a quote. However, they hired the most expensive architect in Mexico, Artigas, who buys the cement and rod in Masaryk [in Polanco neighborhood] and charges the cost of raw materials plus 30 percent for his manual labor. That is why the cabins turned out to be so expensive: when the square meter was worth 3 thousand Mexican pesos, he paid 15 thousand for it.’

We requested an interview with former President Vicente Fox, via Twitter, to get to know the recollection of the facts that the Secodam documented and the disappearance of the file. Nonetheless, until press time, we received no response.

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The Presidential Military Staff took part in the embezzlement

Another revelation derived from the file was the involvement of the Presidential Military Staff in the anomalies, such as the granting of credits to carry out these works or the duplication of contracts.

‘The remodeling of the properties of the official residence Los Pinos is carried out through the Directorate General for Administration of the Presidency and the Presidential Military Staff. We are unaware of the justifications for carrying it out separately, since not only was it subcontracted through the Presidential Military Staff, but also because there were contracts ‘without number’ or register, documents the audit report in its outcomes.

In this regard, Muñoz Leos affirms that once the auditors concluded their work, the then head of the Presidency Office, Ramón Muñoz Gutiérrez, told him: ‘We are at this point and after this everything that follows is to discredit the Presidency, so we have to do something positive. [However, the auditor clarified to him]. ‘This is not my task; do what you think is prudent: my job is to review and report what we find out; so, go ahead, because the objective is that this situation improves.’

Then he adds that after that, Muñoz Gutiérrez summoned the Presidential Military Staff and some other officials to see how they corrected the work. ‘My thesis at that time was that it would be tough to drive prices down, so I proposed that the Presidential Military Staff would conclude the works, make a balance, take stocks and determine costs while, on the other hand, define the responsibilities. However, the work had to be finished’.

The story of the audit

It had barely been seven months since Vicente Fox assumed the Presidency of the Republic when this first case of high-profile corruption broke out. It involved the president directly. An anonymous complaint started a series of alerts in the extinct Secodam and Roberto Muñoz had to begin the procedure.

On June 20, 2001, his team and he notified the 2015 audit order to engineer Joaquín José Cortina and López Negrete, the then Director-General of the Administration of the Presidency– documents the large file. From then on, the Secodam team worked against time and many interests.

‘It was challenging because it was a complaint made to the Compranet system. It was the first time that the PAN government came to power and they did not understand such system: ‘everybody gave several interpretations to it, and it was a job that astonished the then officials because the president had very little time in the post and all this came to light because of Compranet. They wanted a review in 15 minutes,’ recalls the auditor.

They did not conclude it within 15 minutes, but in 120 hours of hard work to integrate the file that the Secretariat of Public Service currently declares nonexistent. The archive shows that, by June 28, Muños Leos’ team was delivering the outcomes (record DGAG / 311/2001).

Even though the Secodam had to cope with much pressure, the public accountant claims that his then-boss, Francisco Barrio, did not try to stop the audit. He seemed to be favorable to the review, but he did not commit to it. When we received the complaint, he told me: ‘Revise it.’ Yes, but more than revising, I needed to conduct interrogations to understand where the mistakes were, even because we did not rely on any documentation. He answered me: ‘You have much to do, and you have to do it quickly.’ However, he did not commit to the cause in the sense that he did not encourage the others who had to deal with the issue after me [the Directorate General for Responsibilities and the legal department of the Secretariat] to pursue the case but let them rest in their laurels’.

After the five days of tension during which all the people involved in the remodeling got interviewed, including architect Artega, the period of impunity started. ‘They, unfortunately, gave this work to the area of responsibilities along with all the evidence,’ says Muñoz Leos.

The greatest exponent of that protection coming from the government was Vicente Fox himself, who was never called to account for the irregular handling of public funds not only in this case but in all the corrupt acts that involved the Presidency of the Republic throughout his mandate.

In that regard, Francisco Gabriel Varela Sandoval, currently in charge of the office of the Undersecretary of Public Service declares to Contralínea that crimes prescribe: ‘If someone did something, they could not come 50 years later to penalize them. The crimes prescribe because some time has already passed. I do not know whether this case has already prescribed, the audit is not my specialty, but it likely did. Moreover, he adds: ‘for instance, the case of [Enrique] Peña Nieto is revisable, and they are doing it.’

The official assures that there are ongoing audits on the Presidency of the Republic during the period of Peña Nieto and that ‘as soon the results are available, they will be public as it happened for the case of Emilio Lozoya, which was made public after carrying out the investigation process.’

In Fox’s case, however, he points out that it is complicated to proceed: ‘I would say that in the administrative aspect, it is not possible. In the criminal field, there are different prescriptions, but it is very complicated due to the time that has already passed’.

The subordinate of Dr. Irma Eréndira Sandoval considers that the value of this type of research is the social judgment and the disqualification is above all a social sanction. ‘It would be good if they sent me the audit to analyze it, guide them on how to act, and know how to continue. An OIC [Internal Control Organ] can analyze if there are sanction elements, and then the information should be verified to know if that is true. Perhaps one of the answers is that there are many elements, but the sanction already prescribed.’

Although Contralínea gave her a copy of the file, as asked, Varela Sandoval no longer reacted to the communications of this weekly paper to deepen the topic.

Consulted on this same case, the doctor in Law Alejandro Romero Gudiño – the former head of the Evaluation and Control Unit of the Vigilance Committee of the Superior Audit of the Federation (Unidad de Evaluación y Control de la Comisión de Vigilancia de la Auditoría Superior de la Federación) and current internal comptroller of the Secretariat of Finance and Public Credit (Secretaría de Hacienda y Crédito Público ) – refers that prescription is the most severe aspect. ‘We are talking about the former law, with three years for minor crimes and five years for more serious crimes. However, since the end of Fox’s term, more than 5 [years] have already passed. Thus, what we can achieve is public conflict, but reaching a political sanction is no longer possible, unfortunately. […] The legal sanction is significant, but the political even more’.

The official points out that during the government of Andrés Manuel López Obrador discretionary items in the budget, such as those handled by Fox, have ceased to exist. “Previously, there were items that only the president could use, and he was doing whatever he wanted, but now these items do not exist anymore.’

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Responsible People, tagged with their names and surnames

The evidence that the team of Muñoz Leos gathered during those five days, and that the area of ​​responsibilities did not take into account, revealed multiple anomalies. ‘The audit establishes who is responsible for what. But what happened? Well, nothing happened. Responsibilities should have been established, and money should have been recovered, and it did not happen. Rojas Magnon resigned, but because the president asked him to resign’, said in an interview the person who was appointed responsible for that audit.

Indeed, in its outcomes, the final audit specifies the irregularities, the infringed regulations, and the alleged people responsible. The name of Rojas Magnon, the then advisor and administrative coordinator of the presidency – he nominated himself for this last position – is repeated continuously.

For instance, in Annex B of the audit, he is cited as the alleged person responsible for ‘proposing contracts by a direct award, exercising functions without having taken office legally.’ They point out that the infringed regulations are articles 214 and 217 of the Criminal Code: ‘improper exercise of the public service’ and ‘improper use of powers and faculties.’

An auditor can determine what happened and who was responsible for that, explains Mr. Muñoz Leos. That is why, he says, his job and his team’s concluded with the delivery of the results. That is how the system works: once the audit comes to an end and infringements of the law are reported, who should proceed is the area of responsibilities. Whereas auditors no longer intervene as they are independent.

Even so, he warns that it was complicated to accuse officials and contractors criminally. “Many administrative problems were found rather than presenting criminal issues. The then Law of Responsibilities was more confused than the current one and allowed many ways out to the same issue: it allowed a very ample power of deliberation’.

For this reason, he claims, the auditor has to bear in mind what are the interests behind something. ‘Normally, people who show their faces are not the ones who take the money. It is effortless to use someone as a cover, as there are many people in need of work’.

– ‘Did you suffer any persecution during Fox’s government’?

– Much less than what people may expect. Something happened, but not that much considering all the interests that lay behind this situation. For instance, they have recently fired me: I have no job because…it is better that I do not say something I should not. It is a  sensitive situation. […] At this moment, I am frozen, punished. However, the only time my family and I suffered some severe threats – when my sons were children – I went to live in Chihuahua. Nonetheless, if I had the chance to do it again, I would do it as the satisfaction derived from this job, which allows you to serve and help the others, is much higher than any threats or pressures.

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Information safeguard

Although the Secretariat of Public Service assures that they did not carry out any audit exercise on contracts AD009-01, AD267-00 and AD268-00 for the remodeling of the Los Pinos during Fox’s six-year term, there is documentary evidence that such agency was in charge of safeguarding the files of the extinct Secodam. There is also evidence that to destroy or disappear such documentation, they needed an external authorization.

Moreover, in a second response – information request No. 0002700068519 – the SFP itself refers to the document 514/CA/031-2012, of May 28, 2012, through which the Administrative Office of this agency sought the agreement of the General Archive of the Nation (AGN-Archivo General de la Nación) to destroy 1 thousand 535 files of the Government Audit Unit, both originals, and copies, ‘concerning the period 1998-2000, and 2006 [sic]’.

With this, the Secretariat of Public Service admits that the files of the Secodam were under their custody and that only after receiving the authorization from the AGN did they proceed to destroy those dated between 1998-2000.

However, that record does not mention it as proof of the destruction of the 2015 audit (carried out in June 2001), but as a proof of the non-existence due to the definitive withdrawal of the inspections carried out in (2006), when the government of Felipe Calderón [in December] began.

This loss affects the Mexican historical memory, and it is a violation of the right to access information, declares Dr. Miguel Alejandro López Olvera, a specialist in administrative law at the Universidad Nacional Autónoma de México (UNAM). ‘The disappearance of documents contributes to the impunity and may affect human right much more than the historical memory.’

The researcher at the Institute of Legal Research of the UNAM explains that Mexicans have the right to know what happened in political, social, cultural, economic, and legal areas. ‘The memory of a country is built from the archives. Thus, it is unjust that they hide or destroy documents as they limit the population itself in accessing their history’.

After winning the elections and taking over the Presidency, Vicente Fox arbitrarily decided to transform the residence Los Pinos at the expense of the public funds. ‘The issue became increasingly more serious as they decided that the presidential house was not going to be a house anymore, but an office,’ declares Mr. Muñoz Leos.

The memory that has been lost is not minor: every decision made between December 2000 and May 2001 in the areas of public works and acquisition was only recorded in the 2015 final audit, because the newly inaugurated government of Fox did not keep accounts, confirms the auditor.

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Fox, free from sanctions

When the irregularities took place, not only did Fox have power, but also presidential immunity. Dr. López Olvera explains that the politician was not sanctioned because the Mexican Political Constitution was helping him. ‘In compliance with Article 109, the president cannot be responsible, except if he commits ordinary crimes or treason of the country’.

On the other hand, he specifies, the officials who participated in the contracting can be fined. Furthermore, considering that a complex structure in public procurement exists, ‘there is a scheme in which different responsibilities are distributed.’

According to the administrative law expert, an audit like this should not disappear from the historical archive. In case of destruction of documentation, he warns, penalties range from 3 to 10 years in prison, in compliance with the Federal Law on Monuments and Archeological, Artistic and Historical Zones. ‘A document is considered a historical monument.’

However, Luis Manuel Pérez de Acha – doctor in Law at the UNAM – points out that even though the SFB answered that they did not find the historical document, before claiming that they are hiding information it is crucial to keep on being transparent. In other words, it means presenting the case before the National Institute of Transparency and Access to Government Public Information and Data Protection (Instituto Nacional de Transparencia y Acceso a la Información Pública Gubernamental y Protección de Datos). Only then, he says, could the person responsible be charged for the crimes of co-participation and concealment.

For this reason, as well, auditor Muñoz Leos observes that it is necessary to file a complaint before the Inai since if the file is non-existent and they did not request to destroy it, they incurred in a crime with pre-established sanctions.

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Further evidence

By the beginning of 2008, the 2015 audit file was still in the SFP archives. On January 1 of this same year, the Secretariat disclosed the list of the nine former officials who were fined due to the anomalies detected during the renewing of Los Pinos (La Crónica, ‘They sanctioned nine officials involved in cabañagate,’ by Blanca Estela Botello).

According to the newspaper La Crónica, ‘the sanctioned officials were: Carlos Antonio Rojas Magnon, disqualified for two years; Alberto Ordoñez Benítez, suspended for six months; María Isabel Jiménez Almaráz, suspended for six months; Gustavo Cortés Valdés, suspended for six months. Luciano Rubén Pérez Hernández, suspended for thirty days; Rómulo de Jesús Munguía Salazar, suspended for three months; José Luis Arreola Salcido, suspended for three months; Eduardo Ignacio Seldner Ávila, for three months, and Gabriel López Figueroa, suspended for forty-five days’.

Dr. Arturo Hernández Magallón, an academic at the Faculty of Political and Social Sciences, points out that in cases of government corruption such as the remodeling of Los Pinos is, where several breaches of contracts were registered, enterprises should be sanctioned as well. ‘Sanctions are given to disqualify them from competing again in government tenders, according to the damage generated to the public patrimony and not being able to participate for a certain period “.

Furthermore, he adds that ‘each phenomenon is different. For instance, there is the case of Emilio Lozoya, who lied on the bank accounts employed in Pemex, did not provide information. Hence, he has been imposed an economic sanction, and he was disqualified for ten years. On Fox’s case, the economic sanction is lower, and it has prescribed by now.  The outcomes also change according to how much damage or social harm was caused: nowadays, there is the case of lack of paper to create textbooks; the purchase of paper got increasingly complicated. This kind of issues need to be solved rapidly, and it was solved with a direct award since there was neither suppliers nor much waiting time’.

In Fox’s case, the list of irregularities whom Roberto Muñoz Leos documented, seems to be endless. ‘The house of the President before Fox [Ernesto Zedillo] was 400 square meters big and, even though it was not a palace, it was a big house full of candelabra, ironwork, marble and costly items which [with Fox taking over] got lost. What happened to them, no one knows. Who took them, no one. [During the interrogation] Artigas said that he did not. Also, since there was not even a person responsible for making it or purchasing it, then they never got to know the truth. The fact that there are not people responsible for small purchases is what affected us most [as a country].  By now, this continues to operate like this.’

Jordana González/Jorge Baca/Marcial Yangali/Nancy Flores

Translated by: Federica Antoniani

 

 

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