Commentary: Fox's Mexican Corruption Hunt Turns Risky--For Him

If Pemexgate fails to produce results, Fox's reform agenda will stall out

By Geri Smith

Charges of corruption have dogged Mexico's Institutional Revolutionary Party for most of its 73 years. Indeed, the party's checkered past contributed mightily to its historic defeat in the most recent presidential elections. But now the PRI is being engulfed by a corruption scandal so huge it makes previous sins seem small by comparison. The government of Vicente Fox is looking into allegations that the PRI siphoned as much as $120 million from national oil monopoly Petróleos Mexicanos (Pemex) and, with the help of the oil-workers' union, pumped it into the campaign coffers of the party's candidate in the 2000 presidential race. If the charges stick, the PRI risks losing federal funding for party activities. In the worst-case scenario, it could even lose its registration as a political party.

At first glance, the investigation into the PRI's past misdeeds looks like proof that Fox is finally making good on his pledge to root out corruption. But PRI leaders charge that the probe is politically motivated, designed to punish the party for spiking Fox's unpopular tax reform proposals in December. "Fox is confusing the fight against [corruption] with revenge," said PRI President Dulce María Sauri, who has vehemently denied any wrongdoing by the party. Other critics say Fox is trying to discredit the PRI so his National Action Party (PAN) can secure a congressional majority in midterm elections in 2003.

Fox had better hope that the evidence compiled by his anti-corruption czar is airtight. Otherwise, the episode could backfire, sapping Fox's dwindling stock of political capital and making it nearly impossible for him to win congressional approval for an ambitious roster of reforms.

It doesn't help that Fox and his team started leaking details of the case before it was announced that the year-old investigation was being turned over to the Attorney General's office. Of course, in a country with 40% of the population below the poverty line, many are angered that the PRI, which received more than $91 million in federal funds for the 2000 presidential campaign, may have siphoned cash from Pemex. Angry, but wary too: The public, which under the PRI had to put up with more than its share of sham trials, does not want to see another act of politically motivated revenge.

If the charges against the PRI can be proved, Fox will get a big boost. He needs it: The economic slump has driven his approval ratings to just 48%, down from 78% a year ago. Voters also have soured on Fox because of his lack of progress in reducing crime and poverty.

To advance his agenda, Fox will need to demonstrate greater political savvy in his dealings with the PRI-dominated Congress. So far, he has extended few olive branches to opposition parties, contributing to a contentious "us versus them" atmosphere. Fox may have assumed Pemexgate would deal a humiliating, even mortal, blow to an already wounded PRI. Yet the siege has only served to unite the party, even as it heads into a hard-fought Feb. 24 internal election for party leadership.

A PRI united in fury could also block Fox's next big proposal. In December, the PAN introduced legislation that would open electricity generation and distribution to private investment. The bill requires changes to the constitution, meaning Fox needs the support of the PRI and the center-left Party of the Democratic Revolution. This is a controversial idea that requires skillful political handling to succeed, since many Mexicans feel the energy industry is a public patrimony. So far, Fox has been anything but adept. On Jan. 29, the government announced a big reduction in government subsidies for residential electricity rates, which will result in steep increases for middle-class families. But officials failed to make their case that electricity reform would lower rates over the medium to long term by promoting competition.

Fox could still turn this situation around. But he'll need a cool head to prevail. And that means acting like a statesman, not a pol out to even the score. Mexicans want results, not recriminations.

Smith covers Mexican politics and business.

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