Some indicators of corruption

Yesterday I was reading Mural, one of the better local dailies (there are five here), and I came upon this startling statistic: In the past 18 years, Mexico´s Secretary of Public Affairs has levied $3.3 billion dollars in fines (that´s correct, 40 billion pesos, or $3.3 billion dollars) against government officials for corruption.

That amounts to about $190 million dollars in fines a year against corrupt officials.

But the government has actually collected less than 1% of those fines. Why is the collection rate so bad? According to the article, the appeals process can be dragged out indefinitely, and, if it appears there will be a final resolution against the appelant in the case, he merely unloads all his assets so the fine can´t be collected. Perfectly legal.

Unbid contracts represent 97% of the total

On the same front page was a story about the handling of public contracts under the mayor of Guadalajara, Aristóteles Sandoval, who was recently elected on an anti-corruption platform.

As it turns out, the new regime has a worse record than the previous one in terms of awarding contracts not subject to a public bidding process. Under Sandoval, direct contract awards, made by the head of public works, represent 70% of total contracts, and another 27% are awarded to invited bidders.



Evidently the rules that require public bidding are open to interpretation. Juan Carlos Uranga, secretary of public works, says he alone decides who gets contract awards and who gets invited to make proposals for these unbid contracts. "And there is nothing untoward about it," he says.

The previous administration had 13% of contracts open to public bid, compared to this administration´s 3%.

Mexicans don´t trust politicians, police or judges

American newspapers are starting to pick up on the Mexican war (and it is a war) on drug traffickers.

A typical American response would be stronger enforcement, task forces, aggressive prosecution and so on. That is not likely to happen here. (See how it works in Mexico.)

Mexicans believe that their police and judges are corrupt, along with their politicians. Who would you tell about crime and corruption when the highest authorities in your town or state are considered corrupt?

Scary poll results

I share with you a poll from one of the most respected Mexican newspaper groups, Reforma. It´s pretty simple: On a scale of 0 to 10, with 0 being not corrupt and 10 being very corrupt, how would you rate various professions and institutions in Mexico?

One was judges. 71% of those questioned in the poll rated judges as 7 or higher on the corruption scale. And they´re probably right.

Naive me, I would score the U.S. judges at less than 1 on the corruption scale. Would I be right, in your opinion?

Politicans are considered most corrupt, followed by the police

The percentage of people who gave a score of 7-10 on the corruption scale to various professions:
Politicians -- 87% of those polled gave a score of 7-10, up from 81% eight years ago
Police -- 80%
Union leaders -- 79%
Judges -- 71%
Lawyers -- 69%
Bureaucrats -- 65%
Business executives -- 59%
Priests -- 40%, up from 28% seven years ago
Journalists -- 39%, up from 33% eight years ago
Doctors -- 35%

The army, interestingly enough, is one of the country´s most trusted institutions, which is why it is leading the government´s ant-crime effort.

How do you root out crime

Even if you assume that people are wrong in their judgment about who is corrupt, the fact that people don´t trust their institutions makes it difficult to establish rule of law.

People don´t feel confident giving information to authorities about criminal activity.

Corruption is not described or defined for the purposes of the poll, which was of 820 Mexican adults, by telephone at their homes, Nov. 7 and 8. The poll supposedly has a margin of error of 3.4% and a confidence factor of 95 percent. Because Reforma keeps news behind a pay wall, I can´t link to the original article.

Money and arms from the north

Mexico has become the No. 1 source of illegal drugs shipped to the U.S. Rolling Stone did an interesting piece that captures how broadly and deeply the money from this trade has corrupted every level of Mexican society.

As many as a third of Mexico´s states are considered narco states, where everyone from the governor on down is involved in protecting and benefiting from the drug trafficking.

The Wall Street Journal did an in-depth piece on Mexican trafficking of marijuana and cocaine in February.

The trade generates an estimated $20 billion in revenues, which makes illegal drugs Mexico´s third largest export after oil and automotive products, according to the Wall Street Journal. (If you prefer, here´s the WSJ Spanish version.) That figure represents about 2% of the country´s gross domestic product.

Corruption outrages Mexicans, but they feel powerless

A young man I work with has daily fits of outrage when he reads my copy of the leading daily newspaper here in Guadalajara.

The front page always has a story of corruption or inefficiency whose audacity leaves Poncho frustrated. What´s worse is that these revelations don´t seem to bother any of the public officials or move them to action. There are no crusaders against corruption.


Asphalt for 20 times the going rate

Yesterday Poncho was in a tizzy because of an article about how the city of Guadalajara is paying 20 times the going rate for asphalt used to patch potholes. The contract was awarded to Perma-Patch, a U.S. company, without bidding.

The head of public services said it was the acquisitions department that was responsible. No one from the acquisitions department was quoted. This kind of buck-passing is typical. No one is responsible or held accountable.

So far this year, the city has paid more than $600,000 for the asphalt on this no-bid contract and has exceeded its budget in this category.

Poncho is putting his hopes on a reformist mayor to change things.

Making off with the money from the PTA

Yesterday El Universal newspaper published a story about how voluntary parent contributions to improve schools are regularly diverted to the personal use of principals and others in charge.

These contributions include revenues from fund-raising activities like school lunch counters and amount to an estimated $1.3 billion (17 billion pesos) annually, according to the National Association of Parents. It was this organization that denounced several cases of fraud. (The figure of $1.3 billion works out to $52 for each child in Mexican schools.)

According to the parents´ group, no one pays any attention to how this money is spent. School officials browbeat parents for contributions and then divert it to personal uses such as sending their kids to the U.S.


$2 billion in oil products stolen in the past year

The state-run oil company, Pemex, is well known for its inefficiency and lax management. In the past year an estimated $2 billion of its oil and gas was stolen. That´s billion with a B. Organized crime milks its oil and gas lines and sells the products in Mexico and the U.S.

A reasonable person might ask how Pemex knows that the thefts totaled $2 billion. Given its management practices, losses could have been greater.

Bonuses paid despite falling production

The 114,000 workers at Pemex are known in the oil industry to be among the least efficient in the world. (see Economist article)

They just started receiving a 21% monthly bonus on top of their salary. The bonus is supposed to be based on "encouraging and increasing productivity". They´re getting it even though production has been falling for years.

Suggesting foreign investment is political suicide

Pemex spends virtually all it takes in rather than investing in new wells, production and refineries. Because of a lack of refining capacity, Pemex has to import 40 percent of its gasoline.

Where would new investment come from? Either from wiser managment of its oil revenues, which would mean cutting lots of cushy jobs and sweet contracts, or from letting foreign companies invest and thus control part of the reserves. Both options are politically unacceptable.

The sad part of this is that it affects public services. More than a third of Mexico´s federal budget comes from oil revenues.

Mexicans will submit blank ballots in protest

July 5 is election day here in Mexico, the equivalent our mid-term elections, in which the federal and state legislators and municipal officials are elected. The president and state governors are elected in three years.

There is a significant movement to vote with a blank or spoiled ballot (voto nulo, voto blanco) to show public disgust with corrupt and ineffective elected officials at all levels. The poster shown here says, loosely translated, “I´m nullifying my vote”.

The Los Angeles Times, which has the best English-language coverage of Mexico, had a good piece on this.

The Wall Street Journal did an in-depth article on how drug money is influencing the campaigns, with the drug gangs either putting forth their own candidates or bankrolling others.

A leading political columnist, Denise Dresser, wrote in Proceso recently that there are 24 valid reasons to protest with a blank ballot. The national elections commission is horrified by the talk and is advertising heavily to persuade Mexicans not to throw away their vote.

An internet movement with significant impact

What´s significant is that the voto nulo effort is almost completely internet driven. Although there is plenty of paid political advertising by candidates and parties, this grass-roots movement is flying off the radar and attracting huge support.

Because of voter alienation and indifference, only about 35-40% of the eligible voters will go to the polls this Sunday. Meanwhile, the voto nulo may represent as much as 7 or 8 percent of the vote. In other words, it could be decisive.

Cellphones in the voting booth

There are rumors that some political parties are offering to pay people for their votes, and are requiring voters to take a cellphone picture of their ballot in order to get paid. So there was talk of prohibiting cellphones at polling places, but that was dropped for fear that it couldn´t be enforced.

46 toddlers die in a day-care fire

Last month, a day care center in Hermosillo, Sonora, was hit by a fire at 3 p.m. while several hundred kids were napping, and 46 of them died (photo from El Financiero). Turns out the owners of the place were the wives of two cabinet members of the governor. State subsidies of day care make this a huge business, and getting a license is something of a prize.

So far, no one has been charged or arrested, despite public protests by thousands. The national social services agency is blaming the state and the owners, but what that will translate into -- fines or criminal charges, for example -- is not at all clear.

It also is not clear what all of the day-care center´s workers were doing at the time of the fire. None of them were among the dead.

The families of the dead children are eligible to get a $12,000 payment from the government. If they accept it, they give up their rights to pursue any action against the state. Some of the families are petitioning the nation´s supreme court to use its investigative powers in the case.

Crocodile bites dog

The English language newspaper Guadalajara Reporter carried a story recently about an American couple outraged that their family dog had been devoured by a crocodile near a beach here in the state of Jalisco.

Clearly, they felt that someone should be held responsible. Their family pet was frolicking in a swampy area when it was attacked. Why weren´t there warning signs? Why weren´t there fences? And so on. This is a typical American attitude. We should be protected from all danger. It´s someone else´s fault and I should be compensated. Mexico doesn´t work that way.

53 inmates sprung from Zacatecas prison

The prison warden and two top guards were arrested, according to the LA Times, after 53 prisoners related to one of the major drug gangs were sprung from prison in a lightning raid without any official resistance.

Reportedly there were 17 vehicles and a helicopter involved in the raid.



Local cuisine

This is suckling pig cooked “al pastor”, or shepherd style. These brick fire pits are common at restaurants here in Jalisco. The meat is put on a big stick, two feet or so from a wood fire, and cooked slowly. It´s great stuff. Wrap it up in a tortilla with some veggies, some sauce, maybe some guacamole or mayonnaise...

Everyone asks about what the food is like. The simple food is very good. A lot of it is heavy and deep fried, which is fine if you work with your hands and are out in the field all day, but not good if you´re sedentary. We´re eating pretty carefully.

Washington and San Juan, Puerto Rico



This is one of the major forts in San Juan, built 400 years ago. Cindy joined me in Puerto Rico for a conference of the National Association of Hispanic Journalists. I moderated a couple of panels and was on a third, which was about the advantages of being bilingual. For me, the advantage was starting a new career at age 55.

Dust clouds from the Sahara envelop PR

While we were there, the skies were hazy, and health authorities reported increased cases of breathing problems caused by wind-borne dust from the Sahara desert. The National Weather Service links this dust to severe weather as well. Who knew?

San Juan was the second leg of a trip that included three days in Washington to meet with folks from the International Center for Journalists, whose Knight program provides my fellowship. We were working out details of an agreement with the University of Guadalajara, which is hosting the Digital Journalism Center that I´m running. This is our new web page.
Unfortunately, my schedule was too jammed to escape to Baltimore and visit friends.




Relaxing at a scenic overlook (above). The cap is a Brooklyn Dodgers 1938 model, in honor of my grandfather and great-grandparents, who lived in Brooklyn. Cindy guards the coast on the wall of the fort. A statue in San Juan commemorating a demonstration by thousands of women against the English (below). At the White House.

Crime in Guadalajara and other news bits

Last week the big news was that the head of the state´s homicide squad was assassinated while he was driving on the Guadalajara beltway.

Two men on a motorcycle pulled alongside of the chief´s personal pickup truck and began blasting away. At least 12 bullets penetrated the driver´s side door and window. The chief died instantly and crashed into two other vehicles. A neighbor who was getting a lift to work was in the passenger seat and died at a hospital several hours later.

Two suspects were caught after motorcycle police gave chase and a roadblock was set up. This kind of capture is rare.

Evidently the motive in the shooting was that one group of narco thugs was upset about the arrest of one of their pals.


The news media discover Mexico
Ever since Hillary Clinton came down here a while ago the American news media have begun to discover the neighbor on the southern border. Today I saw that Business Week is touting a cover story on Mexico.

Give Hillary credit for saying what American leaders should have been saying years ago: that the enormous sums of money and the high-powered weapons flowing down from the U.S., the world´s biggest market for illegal drugs, have destabilized Mexico. Drug money from the U.S. helps corrupt officials at all levels.


Crooked cab drivers
Funny story in Mural this week. The newspaper did en exposé on how Gudalajara cab drivers systematically overcharge passengers.

The head of regulation for taxis said, Hey, you´re exaggerating the problem. We got only 5 complaints last year. There is a phone number for complaints on every taxi´s windshield.

The paper called the taxi complaint number. It had been disconnected.

This would be funnier if it weren´t so frustrating. The exposé follows Mural´s series on how the suppliers of liquid natural gas systematically overcharge (a truck comes to your house and pumps up your tank).

Here public officials can pretty much ignore corruption stories without worrying about it.

The cardinal and abortion

On the other hand, the Catholic Church still has a lot of clout in the state of Jalisco, where we live. He managed to get members of the two major opposing parties last week to approve a ban on abortions in this state.

The Church is a powerful conservative force here, and state elections are just around the corner. No candidate wants to risk being denounced from the pulpit.

Why newspaper exposés have little impact in México

Every day I read Mural and Público Milenio, two of the most important newspapers in Guadalajara, and I´m instantly depressed.

The amount of corruption, self-dealing, inefficiency and mismanagement in the public sector chronicled by these two newspapers is staggering. What´s depressing is that despite the publication of this information, almost nothing happens.

One newspaper editor here explained to me that the news media themselves are considered suspect by the public. Readers tend to assume that the owners of the newspaper or media outlet are using an exposé for political reasons, to punish enemies.

At the same time there are no ambitious procecutors or legislators ready to hold the villains accountable. The few citizens groups pressing for change are relatively ineffective.

A system with little accountability
People here don´t view the government and public money as theirs. They view it as the private playground of the politicians. Seventy years of rule by a single powerful party, the PRI, provided a kind of stability and the appearances of democracy but no real citizen involvement and no responsiveness. People don´t complain to their congressman or councilman. They don´t see the elected officials as their representatives. Voters are apathetic.

Long before drug money exacerbated the corruption, the political system was self-contained, self-sustaining. The courts, the public prosecutors, the labor unions, the police, the congress and the executive branch are all part of this system whose purpose is to share power, influence and money among themselves. The head of the teachers union, which gets enormous sums from the government, feels free to buy 59 Hummers for her local organizers, and there is an outcry, a bunch of lame excuses and then...nothing.

Nobody wants to rock the boat because their own private source of money and influence might be tossed overboard.

During the 2003 mid-term elections, after the PAN party had overthrown the PRI monopoly, this quote in the New York Times from a writer and painter, Enrique Canales, seemed emblematic:

''The control of the political bureaucracy, the teachers, the police, the bus drivers, that hasn't changed,'' he said. ''The PAN tries to clean up the system, but 85 percent of the people in it remain PRI-istas. So the changes that the PAN proposes do not show up at the local level. People don't see a difference. People don't see a change. It will take two decades to change things.''

Corruption indexes
Various indexes try to measure the corruption in Mexico -- Transparency International among them. By one estimate, corruption consumes 8-12% of Mexico´s GNP, but that doesn´t really capture the inertia of the system.


Failed state
The Pentagon has referred to Mexico as at risk of becoming a “failed state” because large areas of the country are controlled by druglords who own the politicans, from governors to state legislators to police chiefs and, in some cases, journalists. Mexican President Felipe Calderón strongly denies this characterization.

Update March 24: A leading Mexican journalist writing in the New York Times says talk of Mexico as a failed state is a wild exaggeration not based on the facts.

However the leader of a Mexican citizens group pointed out that organized crime has its own system of charging taxes (protection) in many parts of the country.

The Wall Street Journal had an in-depth piece recently on the growing power of the drug cartels in Mexico.

Mexico´s former top cop in drug war arrested for corruption

There could hardly be a better description of what´s going on in Mexico than this article from the Wall Street Journal:

MEXICO CITY -- Mexico's former anti-drug czar has been detained in a widening corruption scandal that suggests a large percentage of top agents assigned to fight the drug trade here have instead been cooperating with cocaine cartels.

Read more...

Why governments are unstable in Latin America

Venezuelan President Hugo Chavez has nationalized a number of industries and shut down a television network that criticized him.





Historians generally agree that the instability in Latin America boils down to a couple of things.

Men not laws
Governments traditionally have been all about men, not laws. In fact, many times a newly elected president will undertake rewriting the constitution so that it supports his party, political beliefs and so on. (This is happening right now in Ecuador, Venezuela, and Bolivia, to name three). So the constitution is often about the person, not the country. When a new president comes in, a new constitution or constitutional reform is often a part of the new regime.

And let´s not be smug. The U.S. and Great Britain had civil wars on their way to creating viable representative democracies, and we still have plenty of corruption. Still, what is different in Latin America is that the revolutions of 1810-20 that kicked out the Spanish did not result in the creation in each country of a constitutional convention, passage of a bill of rights and creation of a viable institutional framework to support a democracy. Basically, whichever clever and powerful person could pull together enough support to control the capital could to some extent control the country.

Multinational companies support dictators
Democracy is messy, so multinational companies, with the support of Democratic and Republican presidents alike over the last 200 years, have supported dictators who guaranteed stability (often through violent repression of dissenters) and no disruption in business. It´s embarrassing for an American to read about all the assassinations and coups we have supported in the interest of protecting the flow of low-cost natural resources, manufactured goods and agricultural products.

The lack of strong local industries has meant these countries are subject to the fluctuations of international commodity prices and other external forces, creating conditions for economic instability, which translates into social and political instability.

Three socialist presidents: Daniel Ortega of Nicaragua, Evo Morales of Bolivia, and Hugo Chávez of Venezuela are part of the new wave in Latin America. Morales and Chavez accuse the U.S. of supporting coups to overthrow their governments. Given our history in Latin America, this argument wins believers. It is also a convenient way to villify opposition movements. (AP photo)



Socialists come to power
Socialist leaders of various stripes have risen to the top recently in Argentina, Brazil, Nicaragua, Bolivia, Venezuela and Ecuador by promising to kick out multinationals and share more of the wealth and the land with the majority. These countries suffered terribly in the 1980s and 1990s when they tried to adopt market-driven economic policies imposed by the International Monetary Fund and World Bank. (These policies are known disparagingly in Latin America as neo-liberalism.) So now these countries are swinging in the other direction, toward state-run economies. The U.S. is worried but shouldn´t be. There is an opportunity to work in a hybrid of the two economic models.


Weak institutions, strong dictators
Today, most countries in Latin America have weak institutions that the public does not respect -- courts, police, congress, executive -- so they trust a system that is like that run by the mafia: you take care of me, I´ll do a favor for you. It´s all about relationships, family connections, friendships, alliances. The law is not trusted, respected or used to resolve disputes. There is even a recognized occupation for people whose job is to facilitate paperwork (gestor in Mexico, tramitedor in Bolivia) by strategic gifts (mordidas en Mexico, coimas in Bolivia) Investors shun a lot of these countries because contracts are hard to enforce (no seguridad jurídica).

Druglords (narcotraficantes) fill the vacuum left by weak institutions. The druglords build schools, playgrounds, hospitals and provide food programs for the poor. In exchange they expect, and get, silence and cooperation. They have destabilized the rule of law in large parts of Chihuahua and other Mexican states.

The rich and the poor
Also you don´t have a big middle class here. When you have a middle-class majority, you have a built-in self-interest in stability. Here there is institutionalized wealth and poverty, which means that you almost always have a very unhappy majority.
In Mexico, which is a relatively prosperous country, more than 40 percent of the people live in poverty, according to a study I read recently. Some 23 million adults in this country of 100 million are either illiterate or didn´t finish primary school.

Most of the poor are indigenous people, usually farmers (campesinos). In the U.S. and Canada we wiped out and moved out all of the indigenous peoples. In Latin America, the Spanish and Portuguese used them to work on their farms and in their mines. The majority in most countries is of indigenous or mixed descent.

So you have built-in social instability that the ruling class has declined to rectify through a program like the New Deal.

Obviously, this is a generalization and simplification. Others could add nuance and more information. John Charles Chasteen´s book Born in Blood and Fire (2000) is very informative, as is Frank Tannenbaum´s 1966 book Ten Keys to Latin America.


Cristina Fernandez, president of Argentina, who succeeded her husband, Nelson Kirchner, in the job.

A culture of bribes

Yesterday El Deber ran this picture of the head of the local Immigration office being hauled off to jail in a big bribery scandal. He is charged with running the highly lucrative business of providing quick turnaround on passports for $300 to $700 at a time when a lot of desperate Bolivians are trying to leave the country to look for work. If you don´t pay the bribes, you have to wait for months to get a passport. He´s smiling probably because he knows he won´t be in jail long. When things cool down he´ll be out.

The pace of bribery picked up recently as April 1 was an important deadline. On that day, Spain would no longer admit Bolivians on tourist visas, the usual way for them to enter the European Community to look for work illegally.
Ironically, the guy going to jail was brought in a few months ago to clean up all of the crooked dealing going on under his predecessor. But there is evidently too much money floating around for anyone to stay clean. One newspaper article mentioned that there was a network of more than 50 travel agencies and an unspecified number of paperwork fixers (tramitadores) involved in this illegal traffic.

Meanwhile, the ruling party of President Evo Morales has shown new levels of audacity in the business of giving jobs to political friends. The old corrupt system was bad, and the new one has taken it to new heights. Under the old system, you had to prove party loyalty to get a government job. Under the new corrupt system of Morales´s party, you also have to pay $500 to $1,000 to the party official who gets you the job. The cash payments are an innovation of the socialist government. When Morales learned of the problem he turned it over to his own party to supposedly clean it up. They charged a couple of low-level sacrificial lambs but all of the ringleaders have escaped any judicial action.

My own experience
I´ve had some visa difficulties of my own with Bolivia´s immigration officials. Let's just say that it helps to know the right people. Meanwhile, the visa that I actually need to be here as a guest university lecturer requires 15 steps, of which I have completed five.

1. It started with an Interpol background check at National Police Headquarters, where I was fingerprinted and photographed. In addition to the legally required fees of 50 bolivianos, I had to pay another 50 bolivianos, a day´s pay, in illegal, undocumented fees for which I was not given receipt. I have a document now that says I´m not an international terrorist or drug smuggler.

2. Center for Tropical Disease Research, 180 bolivianos for blood tests for AIDs and yellow fever; told to return the following day for results. No bribe required.

3. Back to police headquarters to get a certificate of antecedents (show passport to prove I´m an American), required thumbprint, 25 Bs official payment (plus 5 Bs payment, not legal, demanded by clerk), told to come back for document next day.

4. Police headquarters again, proof of residence, also required thumbprint, official payment of 13 Bs (plus 20 Bs illegal payment, demanded by clerk), told to come back for completed document next day.

5. Had photo taken for NIT, national tax ID, downtown atprivate studio, had to come back next day, 15 Bs.

Meanwhile, it´s possible to get your visa extended by anywhere from 30 to 90 days, depending on the whim of the immigration official, by leaving and re-entering the country. I did this once to Peru and once to Chile. It appears that the 15-step visa process will be moot. I´m good through June 18.