CHIHUAHUA, Mexico — A former deputy in President Enrique Peña Nieto’s celebration has been arrested as element of an investigation into the illegal use of public funds to fuel his party’s campaigns in Mexican elections final year, state officials announced on Wednesday.
The former deputy, Alejandro Gutiérrez, is a single of several allies of Mexico’s president suspected of taking part in an embezzlement scheme to propel his party’s possibilities at a time of deep dissatisfaction with the government, according to former officials connected to the scheme and hundreds of pages of documents reviewed by The New York Times.
The arrest of Mr. Gutiérrez, a veteran figure who helped handle the finances of the governing Institutional Revolutionary Party, or PRI, is portion of a widening inquiry into the enormous corruption that occurred under the previous governor of the state of Chihuahua. The governor was a close buddy of Mexico’s president and a increasing star in the party just before he fled to the United States to keep away from corruption charges.
The case against him has already ensnared far more than a dozen former state officials, some of whom are now cooperating with the authorities.
But the investigation is spreading and threatens to attain the highest ranks of government, according to testimony from the former state officials and financial records obtained by The Occasions.
Mr. Gutiérrez is becoming investigated in connection with what former state officials contact a nationwide strategy to funnel tens of millions of dollars in public cash to aid the party’s candidates in gubernatorial elections in 2016.
The funds was sent to states with friendly governors in the celebration, who then developed a trail of government contracts with fake companies that in the end sent the money back for use in campaigns, according to the testimony and records.
At the time, prime officials in the PRI have been worried about losing the state elections in June 2016. The former state officials say the pattern of embezzling cash to finance elections occurred in numerous states exactly where the PRI was frightened of losing handle.
The documents reviewed by The Instances focus largely on the embezzlement scheme in Chihuahua. According to the records, millions of dollars had been transferred in January 2016 from the federal government to the state for the purpose of education.
The funds had been then shuffled and diverted to four companies utilised to embezzle money — organizations that the nation’s tax auditor has blacklisted as front companies, according to the government contracts reviewed by The Instances.
Those firms, supposedly hired by the state of Chihuahua to offer educational services, received around $14 million in their accounts, according to the contracts and the bank records displaying that the funds had been received.
But the firms offered no such solutions, according to affidavits from current education officials in the state. As an alternative, the cash was turned into money and returned to the PRI to be utilised for election campaigns, according to the former state officials connected to the scheme.
1 of them, Ricardo Yáñez, the former minister of education in Chihuahua, described the plot in a sentencing document. He is serving a four-year prison sentence.
Not all of the income went to politicking, nevertheless.
About $230,000 was deposited straight into a company account operated by Mr. Gutiérrez, the former PRI deputy, according to bank records and witness testimony.
The governor of Chihuahua announced the arrest on Twitter on Wednesday evening, describing it as a “joint operation with the federal and state police.” The governor stated that Mr. Gutiérrez had been charged with embezzlement.
The federal Finance Ministry denied that any illicit payments had been created, contending that the nation’s spending budget method had been “strengthened with strict controls” on multiple fronts “to guarantee” accountability in the use of public resources.
But the trail of payments outlined in the documents recommend a tie among the embezzlement scheme and the party at a national level.
Contracts and bank records show that millions of dollars went to some of the identical phony organizations, or organizations connected to them, in the states of Sonora and Durango. Bank records also show hundreds of thousands of dollars in deposits to some of the companies by the state of Colima. And in their testimony, the former state officials connected to the scheme mentioned it was carried out in the states of Veracruz and Tamaulipas.
State officials in Veracruz did not respond to repeated requests for comment. And the current governor of Tamaulipas, an opposition politician who won his seat for the duration of the 2016 elections, mentioned a overview by his staff found no contracts with the four major fake firms.
It is nevertheless unclear who else might have taken portion in the scheme.
In the sentencing document, Mr. Yáñez, the state education minister who has currently been convicted, is quoted as saying that each Mr. Gutiérrez and Chihuahua’s former governor, César Duarte, told him that the money had been sent from the federal government to finance the party’s election campaigns. He stated they told him the exact same program had been carried out in several states.
Mr. Duarte has fled to the United States, exactly where he is avoiding federal and state corruption charges, which includes allegations that he stole more than $300 million whilst in charge of the state.
Mr. Duarte’s daughter is an American citizen, and according to legal documents reviewed by The Occasions, the former governor applied for a green card.
Mr. Duarte is believed to be living in Texas and New Mexico. Attempts to reach Mr. Duarte by phone and by way of visits to ten properties in and around El Paso that are believed to belong to him were unsuccessful.
The head of Mr. Peña Nieto’s party at the time of the campaign finance scheme, Manlio Fabio Beltrones, has extended been allied with the president and his family members.
Mr. Beltrones is also named in the sentencing document. Mr. Yáñez mentioned he was told by the former governor that Mr. Beltrones had hatched the program. Attempts to attain Mr. Beltrones on Wednesday had been unsuccessful.
In the document, Mr. Yáñez mentioned that he met with Mr. Gutiérrez, the former PRI deputy, and other officials at the party’s headquarters in Mexico City. At that point, the PRI had already lost the election and the mind-set of the participants switched to harm control.
The campaign circumstances are component of a wide-ranging investigation underway in Chihuahua, where the new governor, Javier Corral, has assigned his lawyer general to delve into corruption.
The leeway that prosecutors have been granted by Mr. Corral is uncommon in Mexico, exactly where investigations are seldom begun and, if permitted, rarely reach greater than low-level functionaries.
Over months, prosecutors have gradually worked their way by way of a roster of former officials who served below the earlier governor, Mr. Duarte, pressuring them to cooperate.
In January, 2016, the state of Chihuahua was facing monetary headwinds and needed aid making payroll. Jamie Herrera, the former state finance minister under Mr. Duarte, required almost $16 million to ease the economic strain.
Two days later, in a seven-page contract, the federal Finance Ministry granted the request. According to the governor’s office, a two-day turnaround for such a massive request was staggeringly rapidly.
But the explanation for the transfer, according to the former state officials, was a hoax. In reality, they stated, Mr. Gutiérrez, the former PRI deputy, had named officials in Chihuahua to have them to ask for the income from federal officials, the testimony shows.
The operation, the state officials explained, was a complicated, tried-and-correct way to embezzle funds. The officials had been offered the names of 4 firms that would supposedly give educational solutions for the state — front firms from which celebration operatives could siphon the funds.
A single firm received about $five.two million for selling the state human sources software program.
3 other firms were paid millions for training and educational solutions, according to the contracts reviewed by The Times.
According to contracting specialists, the amounts paid by the state were astronomically higher for the services they offered.
The payments moved swiftly. By the finish of February, contracts had been drafted and signed by the state officials, and by April the checks have been reduce to each and every of the companies.
Of the roughly $15.eight million sent to the state by the federal government, the party only asked that $14.4 million of it be returned to it, according to the testimony from state officials. The rest, they said, could be spent as officials in the state saw fit.
From every of the firms, the money was then transferred to dozens of other companies, several of which also seem on the national tax authorities’ blacklist of front businesses, according to the documents.
From there, it disappeared. The only clue as to exactly where it went lies with the testimony of the two former state officials, who have been told by party officials that the income was turned into cash spent on campaign financing.
Published at Thu, 21 Dec 2017 03:16:37 +0000