Mexico president, courts spar over legal loopholes

AP News
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Posted: Sep 07, 2011 6:08 PM
Mexico president, courts spar over legal loopholes

The yacht is gone. The Ferrari seized. The men who allegedly gave them to Nestor Moreno have been convicted of bribery in the United States. But the flamboyant former government executive is still free in Mexico in a case that has become a symbol of the nation's corrupt and inefficient justice system.

It also has prompted a bitter quarrel between President Felipe Calderon and the nation's courts, one of which recently released Moreno for what the judge said was a lack of sufficient evidence.

Moreno's release came despite confessions from U.S. executives who admitted to paying him millions of dollars in bribes, and as national newspapers draped photos of his yacht over front-page stories citing alleged proof of his corruption obtained by U.S. prosecutors.

The decision sent Calderon over the edge.

"You catch them and put together a good case, and they get off free," Calderon said Wednesday.

A secretary who answered the telephone at the office of Moreno's lawyer, Hector Galvan, said he was not in Wednesday. The Associated Press left a message requesting a comment on his client's behalf.

In 2007, U.S. authorities began investigating schemes in which U.S. companies allegedly paid bribes or kickbacks to officials of Mexico's Federal Electricity Commission, or CFE, in exchange for lucrative contracts.

U.S. prosecutors later handed down indictments against executives in at least two U.S. firms that allegedly paid tens of millions of dollars in kickbacks to Moreno and his colleagues at the commission starting roughly in 2002.

In November 2009, the U.S. Justice Department released a public statement, plainly available to Mexican authorities, describing the kickbacks.

Nonetheless, Moreno, who rose through the ranks at the commission for 35 years, serving as assistant director in 2000-07 and top operating official in 2007-10, was allowed to remain in his post as CFE operations director for almost a year longer.

CFE spokesman Estafano Conde said the U.S. statement didn't mention Moreno by name. He said that while the commission, prosecutors and regulators were aware of the U.S. indictments and started an investigation, they did not find out Moreno was one of the officials involved, until the U.S. news media began mentioning his name in August 2010.

The Mexican news media aren't buying that type of explanation.

One Mexican newspaper quipped it didn't take a Sherlock Holmes to deduce that the bouffant-hairdoed, carefully manicured official was likely the one being implicated by several U.S. businessmen and their Mexican go-betweens.

A separate Justice Department statement this year alleged that a go-between for a California company "authorized money ... to be used to buy a CFE official a $297,500 Ferrari Spyder and a $1.8 million yacht, as well as to pay more than $170,000 toward the official's credit card bills."

A company official also "authorized the transfer of $500,000 to the brother and mother of another CFE official," the statement said.

Yet none of Mexico's anti-corruption agencies was able, apparently, to detect Moreno's corruption _ until the U.S. news media reports emerged. Finally, on Sept. 15, 2010, the CFE released a statement saying Moreno had voluntarily resigned after being on leave since the previous month. It gave no reason for his resignation.

Blanca Varela, a spokeswoman for the country's chief anti-corruption agency, the Public Service Department, refused to reveal when, if ever, the department had opened an investigation into Moreno. She said she was declining to comment "to avoid interfering with any investigation."

Federal prosecutors finally seized Moreno's yacht last October, but it sat at the same slip in an expensive marina for months afterward. Locals joked that he used it to ride Mexico's "ocean of impunity."

It was unclear what happened to the Ferrari.

Mexican prosecutors finally issued an arrest warrant for Moreno on charges of illicit enrichment on Aug. 8. He was arrested Saturday at an airport in Toluca, a city just west of the capital, "while trying to escape justice," the federal Attorney General's Office said in a statement announcing the arrest.

It turns out Moreno already knew the law was after him: Five days before his arrest warrant was even issued, his attorneys asked a judge in the faraway city of Monterrey to issue a temporary injunction, arguing that any attempt to arrest him would violate his constitutional rights. Bribes are often given to officials to provide advance notice of impending arrest warrants to defendants or their lawyers.

The judge agreed to issue the injunction, which prosecutors say expired Aug. 30. Yet a Mexico City judge cited the injunction when ordering Moreno's release Sunday.

Stung by Calderon's criticism, the Mexico Federal Judiciary Council, which oversees the courts, defended the judge, noting that under Mexican law illicit enrichment is not considered a serious crime and is eligible for bail.

The council suggested that the president, a lawyer himself, was undermining the nation by knocking the judges.

"Questioning the work of the judges without any basis, automatically and without any proof, constitutes a threat to national stability," judiciary council member Juan Carlos Cruz Razo said in a clear reference to Calderon's remarks.

The president responded Wednesday, saying that "what truly damages the safety and stability of the country is impunity, is the fact that thieves and criminals are out walking the streets."

In the United States, the wheels of justice have already rolled in the case: A California-based company and two of its executives were convicted in May under the Foreign Corrupt Practices Act for allegedly bribing Moreno with the yacht and the Ferrari. The executives face prison sentences of more than 30 years.

Mexican authorities' lack of progress in prosecuting Moreno has focused renewed attention on the country's system of protective injunctions, known as "amparos."

Many treasure the system, saying it protects defendants against faulty or unwarranted arrests. But it is often subject to abuse: Wealthy suspects can have skilled attorneys file a blizzard of injunction requests in several jurisdictions simultaneously to block arrests, property searches and prosecution.

Calderon signed reforms in June to make such constitutional appeals less attractive to criminals and more useful for average citizens.

But the reforms, which have not yet taken effect, will also broaden the range of grounds for such appeals and create precedents from rulings. Before, plaintiffs could successfully appeal laws that violated their rights, but the rulings applied only to them.

John Ackerman, of the legal research institute at Mexico's National Autonomous University, wrote that in the Moreno case, there is enough blame to go around for both sides.

"There is definitely a structural problem with regard to the abuse of the amparo, which the new reform is supposed to fix," Ackerman wrote in an email response to a question by The Associated Press.

"But in the CFE case this is definitely aggravated by incompetence on the part of both the prosecution and the judges."