By Dave Graham
MEXICO CITY (Reuters) - Accused a generation ago of engineering the "perfect dictatorship," Mexico's ruling party is now close to agreeing on a plan that could weaken the presidency and strengthen Congress in order to win votes for a major energy reform.
The Institutional Revolutionary Party (PRI) and its opposition rivals are shortly expected to unveil the blueprint for a reform aimed at giving Congress greater oversight of government and allowing lawmakers to serve consecutive terms.
Billed as a step forward for democracy, the electoral reform is a bargaining chip for President Enrique Pena Nieto's most ambitious plan - changing the constitution to allow more private capital into the state-controlled oil industry.
The energy bill is the central pivot of a broader drive for change from telecoms to education that Pena Nieto hopes will help boost Mexico's economic growth, which has long lagged that of other countries in the region.
Pena Nieto needs two-thirds of the votes in Congress to change the constitution. But the PRI does not even have a majority, making it dependent on help from an opposition keen to cut back the party's long-standing domination of Mexican politics.
Some of the votes needed for the oil reform are likely to come from the conservative National Action Party (PAN) - which has made them conditional on electoral reform passing first.
That is close to becoming reality.
"We've come almost 100 percent of the way," Jose Maria Martinez, PAN deputy leader in the Senate, told Reuters, adding that he expected a preliminary deal on electoral reform this week.
Senior politicians in the PRI, PAN and the leftist Party of the Democratic Revolution (PRD) say they see eye-to-eye on most of the reform and PRI Senate leader Emilio Gamboa told local radio that a bill could be voted on next week.
If approved, it would then go to the lower house, improving the chances of a deal on the energy reform this year.
Political sparring over how much to open up the oil industry, which the left is resisting, has raised doubts about whether Congress can approve an energy reform this year.
Still, Martinez of the PAN said talks on the energy bill had advanced significantly in recent weeks, and Interior Minister Miguel Angel Osorio Chong told Mexican radio on Tuesday he saw "the will" in Congress to pass it this year.
The electoral reform seems unlikely to bring about a major change sought by the PAN - a direct run-off between the first and second placed candidates in presidential elections.
"That isn't on the agenda for the PRI at least," said Enrique Burgos, a PRI senator who chairs the committee responsible for constitutional matters in the upper chamber.
What it is certain to contain are changes to reverse a ban on consecutive re-election of legislators in Congress - rules peculiar only to Mexico and Costa Rica in Latin America.
Senators would have the option of serving two consecutive six-year terms, while lower house members would be allowed to sit in Congress for up to three or four three-year stints in total, according to legislators involved in the talks.
At present, legislators can only stay in Congress by hopping between houses for a maximum of 9 to 12 years.
None of the current members of Congress will be eligible for re-election under the new rules, the parties say.
The reform foresees changing the constitution to allow states to decide whether to permit direct re-election of mayors and deputies in the state legislatures, Burgos said.
But it should also do away with the "the omnipotent president" created by the PRI, said Jesus Ortega, an ex-chairman of the PRD and one of his party's chief negotiators.
Changing the electoral law has been a perennial objective of opposition parties looking to erode the power base the PRI has maintained since the party's founders consolidated the political system established after the Mexican Revolution.
So successfully did the PRI hold onto the reins of power from 1929 that Peruvian writer Mario Vargas Llosa in 1990 famously called Mexico the "perfect dictatorship."
After ruling Mexico for 71 years straight, the PRI had become a byword with corruption, authoritarianism and economic crises. In 2000, the PAN won its first presidential election.
At local and state level, however, the PRI remained the dominant force in Mexican politics, and the PAN were never able to secure an outright majority in Congress.
Legislative deadlock and a rising death toll from the PAN government's struggle against drug gangs opened the door for a PRI return in 2012 - but the party was not the dominant force of old when Pena Nieto won last July's election.
For the first time, the PRI failed to secure a majority in either house of Congress when it won the presidency.
To avoid stasis, Pena Nieto made a pact with PAN and PRD leaders. In exchange for their help on efforts to modernize the economy, he would grant them concessions like electoral reform.
However, Congress is still divided. No party has held a majority since the PRI lost control in mid-term elections in 1997.
Lawmakers say the electoral reform is likely to contain rules for formal coalitions among the main parties - if and when the president chooses to form such governments.
"We're also going to mandate that the Senate approves the national development plan and the security strategy," said Martinez, the PAN's deputy leader in the Senate.
The reform also aims to create a more powerful national electoral body - but that has met resistance from states governed by the PRI unwilling to give up the control they have over the outcome of tight elections, said Ortega of the PRD.
"I call it the resistance of the barons," he said.
(Additional reporting by Adriana Barrera, Lizbeth Diaz, and Miguel Gutierrez.; Editing by Simon Gardner and Christopher Wilson)