Ex-Mexican Prosecutor Says He Was Fired to Stymie Corruption Probe

Ex-Mexican Prosecutor Says He Was Fired to Stymie Corruption Probe

Santiago Nieto, dismissed in October, says he was investigating bribes Odebrecht officials said they paid in 2012 to then-top campaign aide of president

The Wall Strett Journal , March 14, 2018

By Juan Montes

MEXICO CITY—The bribery scandal around Brazilian construction giant Odebrecht has led to criminal charges against former presidents in Brazil and Peru. But in Mexico it has brought about a different outcome: the firing of the prosecutor looking into whether any Odebrecht money financed President Enrique Peña Nieto’s 2012 campaign.

Now the prosecutor who was fired is speaking out, saying he was dismissed to stop several investigations he had launched not only into alleged Odebrecht bribes but also into alleged instances of illegal state-election financing by the ruling party.

“I was an annoying prosecutor for the government and they wanted me out,” said Santiago Nieto, in his first extensive interview since his firing in October. He and the president aren’t related.

Mr. Nieto’s comments come amid a growing uproar in Mexico over rampant corruption as the country gears up for presidential elections in July. The front-runner, leftist nationalist Andrés Manuel López Obrador of the National Regeneration Movement, has made fighting graft his main theme. The ruling Institutional Revolutionary Party’s candidate, José Antonio Meade, is running a distant third in polls, which are predicting the party’s worst election outcome in its 90-year history.

Ricardo Anaya, the candidate of the center-right National Action Party who is running second in polls, last week pledged to seek international assistance from the United Nations to investigate the Odebrecht matter and other high-profile alleged incidents of corruption during Mr. Peña Nieto’s administration if he wins.

Several former Odebrecht officials have told Brazilian prosecutors under oath that to secure Mexican government contracts for their firm, they paid $10 million in bribes to Emilio Lozoya while he was a top aide of Mr. Peña Nieto. They said in testimony, transcripts of which The Wall Street Journal has seen, that about $4 million of that sum was handed over in 2012, the year Mr. Peña Nieto was elected president.

The rest flowed to Mr. Lozoya after he became head of state oil giant Petróleos Mexicanos, or Pemex, in December 2012, the former Odebrecht officials said. Odebrecht won contracts with Pemex worth at least $1.5 billion during Mr. Lozoya’s tenure, which ended in 2016. Previously, the company had won only one $317 million construction contract from Pemex, in 2005, according to public records.

Mr. Lozoya, who has denied all wrongdoing, voluntarily testified in October before Mexico’s attorney general’s office. He hasn’t been charged with any crime.

Shortly before his firing, Mr. Nieto said, he had requested banking information from the Cayman Islands, as well as affidavits and other documentation from Brazilian authorities, as part of his effort to decide whether there were grounds to file charges against Mr. Lozoya.

The office of Mexico’s attorney general said Mr. Nieto was fired for illegally disclosing details of an active investigation. The former prosecutor gave a newspaper interview days before he was dismissed in October wrongly suggesting Mr. Lozoya had pressured him in a letter to drop the matter. Mr. Lozoya then released the letter, in which he had merely asked to be summoned to testify.

Shortly after being fired, Mr. Nieto was summoned to a hotel by a top interior minister official, he says. The official told him that the government wanted to maintain a good relationship with him, Mr. Nieto says, and that as a gesture of good faith, offered him money to tide him through not having a job.

“They sought to buy me off to remain silent,” said Mr. Nieto. “I just replied: ‘Sorry, but I can’t receive any money from Peña Nieto.’”

The interior minister official, Jorge Márquez, who no longer works in the government, confirmed he met Mr. Nieto but denied offering him any money. Mexican presidential spokesman Eduardo Sánchez declined to comment on Mr. Nieto’s allegations.

Mr. Nieto says efforts to silence him didn’t stop there. His wife told him she was anonymously sent photos of him with another woman, as well as flirtatious texts between him and other women, according to the former prosecutor. The marriage soon ended. Then came a series of threatening messages via anonymous Telegram accounts, including one with the alias “Death Follows You.”

“Word of advice: Stay out of trouble,” said one of the messages, which were reviewed by The Wall Street Journal.

Mr. Nieto says he is coming forward now because he fears for his life and those of his two teenage daughters. He says he has reported the threats to Mexico’s attorney general office, which declined to comment.

“Mr. Nieto’s case illustrates the lack of independence of Mexican prosecutors,” said Eduardo Bohórquez, the head of Transparencia Mexicana, an anticorruption association in Mexico City.

In October, the country’s attorney general resigned after it emerged that he had evaded car taxes by registering his Ferrari to a fake address in a state that doesn’t tax cars. Upon his departure, the country’s top lawman promised the Odebrecht investigation was moving forward and said charges would be coming “in weeks.”

Since then, no charges related to Odebrecht’s activities in Mexico have been filed.