February 19, 2015 / 9:44 PM / in 3 years

Mexico's top auditor sees consensus for new anti-graft court

MEXICO CITY (Reuters) - Mexico’s top auditor is optimistic the country can address a crisis of confidence in its institutions, in part by introducing an independent court to sanction public servants for corruption offenses, he told Reuters on Thursday.

Congress is to discuss a so-called new anti-corruption system during its current term and Juan Portal, who heads Mexico’s Federal Audit Office (ASF), said there appears to be broad agreement on key aspects of the plan.

Mexico’s government is struggling to win back public confidence since it emerged that President Enrique Pena Nieto, his wife and Finance Minister Luis Videgaray bought houses from companies that won government contracts.

“At this point it seems like things are going well; there’s consensus that there should be an independent court,” Portal said. “We need just one body with the power to sanction all aspects of government.”

Currently, the ASF can recommend sanctions based on audits it conducts. Its recommendations are then passed to Mexico’s Public Administration Ministry, which oversees teams of investigators who are paid by and work in the ministries and government entities they are supposed to regulate.

A Reuters investigation revealed that in the case of state oil company Pemex, those internal investigators almost never apply sanctions the ASF recommends.

The independent court would address the problem highlighted in the report, which is that Mexico’s internal investigators are both judge and jury, Portal said.

The court would also take over the ASF’s responsibility for recouping money from public servants.

Separately, the auditor said that in the case of Pemex and state electricity company CFE, a recent energy reform that converted them to “productive state companies” has created uncertainty over their regulation.

”If there are federal resources spent there, we have to have some participation (in the regulatory process),“ he said. ”But what mechanisms will we have? That’s what we still don’t know.

“There is a lot of uncertainty right now in Pemex and the CFE,” Portal said.

By designating Pemex and CFE productive state companies, the energy reform removed them from some important laws, such as the one against corruption in contracting processes. Initiatives to reform that law so it once again encompasses Pemex and CFE have stalled in Congress.

Portal on Wednesday presented Mexico’s audit report for 2013. He is optimistic the anti-corruption reform will bring changes that will allow the ASF to present audits when they are completed, rather than waiting until February of the following year.

Reporting by Elinor Comlay and Luis Rojas; Editing by Simon Gardner and Dan Grebler

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