(Bloomberg) -- The arrest of a former top government official is a breakthrough for Mexico’s crackdown against corruption, but it puts President Andres Manuel Lopez Obrador in a delicate spot.
On one hand, the arrest of a one-time head of the nation’s state oil company accused of fraud stands as a tangible victory for Lopez Obrador in his crusade against corruption, an issue of overriding importance to Mexicans. But if the case continues to expand, it could involve new and powerful figures and perhaps put national political stability at risk.
Emilio Lozoya, the former CEO of Petroleos Mexicanos, is being held without bail in a jail in Spain on allegations he committed fraud worth $280 million, and Mexico has said it will seek his extradition. A longtime confidant of Lopez Obrador’s predecessor, Enrique Pena Nieto, Lozoya had been a key member of Pena Nieto’s 2012 presidential campaign before being appointed to helm Pemex.
Lopez Obrador, who’s more widely known as AMLO, has already begun to tamp down expectations that Lozoya’s case would actually extend to Pena Nieto. The former president isn’t accused of any wrongdoing.
“My position is that the president should not be persecuted,” AMLO said Thursday after being asked by reporters about investigating his predecessor.
Lozoya, who’s being held on corruption allegations involving steelmaker Altos Hornos de Mexico and Brazilian construction firm Odebrecht SA, is the highest-profile arrest yet for Lopez Obrador’s anti-corruption push.
Ex-Pemex CEO Arrested in Spain, Boosting AMLO’s Graft Crackdown
AMLO won a landslide victory in 2018 after promising to root out Mexico’s endemic corruption. The country ranks 130 among 180 nations in Transparency International’s Corruption Perceptions Index.
Analysts say AMLO will do everything he can to contain the probe so it doesn’t divide Mexico in a way similar to Brazil’s experience with the sprawling bribery scandal called Carwash.
Carwash, known in Brazil as Lava Jato, ensnared scores of corporate executives and politicians, including former President Luiz Inacio Lula da Silva. The political crisis that ensued helped trigger one of the country’s deepest recessions.
“Unlike the Lava Jato investigations in Brazil, Lopez Obrador will remain in control of the investigations, and the signal he has sent so far is that it is unlikely that he will allow the investigations to grow and spread out of control,” said Eurasia Group analyst Carlos Petersen. “He likely wants to avoid this having deeper economic consequences.”
Lozoya’s arrest could pave the way for others, Mexico’s Attorney General Alejandro Gertz told newspaper El Universal in an interview. “All the cases that we have already opened, which are more than 10, have a common denominator that you can see very clearly: there is a system, a way of operating.”
Lozoya fled from Mexico and had been on the run for several months, hiding from authorities using his vast network of contacts and deep pockets to avoid apprehension, authorities said. Lozoya’s lawyers have said he is innocent.
He could face up to 15 years in prison, Spanish Judge Ismael Moreno said Thursday. On his arrest, Lozoya was in possession of a drivers license in the name of an alias but with his actual photograph, prompting the court to rule him a flight risk.
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