August 21, 2015 / 8:09 PM / 2 years ago

Mexico president, finance minister cleared in ethics probe

MEXICO CITY (Reuters) - A Mexican government auditor on Friday exonerated President Enrique Peña Nieto and his finance minister from any wrongdoing over purchases of homes from public contractors, but opposition lawmakers poured scorn over the bid to lay the scandal to rest.

Mexico's President Enrique Pena Nieto speaks during a news conference at the Los Pinos official residence in Mexico City, Mexico August 13, 2015. REUTERS/Henry Romero

Virgilio Andrade, head of the Public Administration Ministry, said the investigation showed that neither Peña Nieto nor Finance Minister Luis Videgaray had gained benefits or tried to influence officials responsible for awarding contracts to companies that sold homes to them and the president’s wife.

Appointed by Peña Nieto to run the public administration ministry after an outcry over the homes, Andrade said investigators had questioned 111 officials involved in awarding 33 contracts to the companies linked to the homes.

In a news conference to announce the probe’s findings, Andrade explained how Peña Nieto and Videgaray had not broken any laws and argued that the two politicians had not held public office at relevant moments in the chronology of the purchases.

“It was determined there is no conflict of interest,” Andrade said before facing repeated questions from reporters about how his ministry had reached its conclusions.

Speaking later on Friday, Peña Nieto said the investigation showed that he, his wife and Videgaray had not broken any laws.

“Nonetheless,” he said, “I‘m aware and I recognize that these events created interpretations that hurt and outraged many Mexicans. To all those people, I offer a sincere apology.”

Videgaray bought his home in October 2012 when he was head of the transition team formed after Peña Nieto won the July 2012 presidential election, and had been expected to hold a top cabinet post once they took office that December.

Also, by the time first lady Angelica Rivera agreed to buy her multi-million dollar house in January 2012, Peña Nieto was the clear favorite to win the presidency.

The controversy erupted last November when it emerged Rivera was acquiring her home from a company that was part of a Chinese-led consortium to build a $3.75 billion rail link.

The company was headed by contractor Juan Armando Hinojosa, and the government canceled the rail contract just before a major media investigation on the home purchase was published.

Andrade’s arguments were in line with the position taken by the Mexican presidency, whose chief spokesman in January said there would be no mea culpa over the purchases.

“It was a pantomime, and we all expected this result,” said Fernando Belaunzaran, a leftist opposition congressman. “The investigation itself was a conflict of interest.”

Ricardo Anaya, head of the opposition center-right National Action Party (PAN), dismissed the investigation as a “joke.”

Andrade told reporters Rivera had returned the house to Hinojosa’s company and rejected the idea the entrepreneur’s ties with Peña Nieto posed any moral dilemma.

“Conflict of interest does not materialize with friendship,” he said, adding that the investigation had followed both the letter and “the spirit” of the law.

The housing revelations were deeply embarrassing to Peña Nieto because the lucrative rail contract was canceled just as he was about to set off to China for a state visit.

It subsequently emerged that Videgaray had purchased a home from Hinojosa and that Peña Nieto enjoyed rent-free use of another Hinojosa property during the 2012 election campaign.

Further media investigations showed Peña Nieto had bought a property a decade ago from a different company that subsequently went on to acquire substantial government business.

Additional reporting by Dave Graham, Joanna Zuckerman Bernstein, Michael O'Boyle, Christine Murray; editing by Paul Simao and Alan Crosby

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