CRE Executive Secretary Steps Down

Miguel Angel Rincon Velazquez resigns from his post as Executive Secretary of the Energy Regulatory Commission (CRE) following allegations of corruption leaked to the media and the authority’s obvious reluctance to issue electricity and oil permits to private energy producers.

In a brief statement yesterday, the regulator informed that the executive secretary had left his position without providing any reasoning behind his resignation, quickly pivoting to say that president commissioner Leopoldo Vicente Melchi would be announcing a new appointee to replace him in the following hours in compliance with provisions outlined in the Law of Coordinated Regulatory Bodies in Energy Matters (LORCME).

“I believe that the directors of the CRE are serious, honest and responsible people. The members of the council could be changed, now they are all upright. I can feel at ease, I know that there is no corruption in the CRE…” President Andres Manuel Lopez Obrador said earlier this month in dismissal of CRE corruption allegations.

This, in contrast to complaint reports that had been filed against the former executive secretary alleging he had deliberately impeded permit processing and projects while “cooperating” with petrol companies to grant their operating permits. Alarmingly, according to Contralina, he may not have been acting alone as other CRE members have also been accused of “acts of corruption” in collusion with public servants of adjacent organization.

At the direction of the executive branch,  the commission has not granted private energy producers permits since last year, a clear indication of market manipulation says energy coordinator for the Mexican Institute for Competitiveness (IMCO), Oscar Ocampo. Evidently, the CRE has complied, but more worrisome is the possible network of corruption across other regulatory bodies.

Coincidently, Rincon Velazquez took office in October 2019 after the commission had seen a wave of resignations from high-level positions at the beginning of Lopez Obrador’s term. His resignation marks the first among senior officials since the formation of the cabinet. Moreover, given the details of the leaked information there may be more to come following a more detailed investigation.

Overall, although this revelation may not come to a surprise to private energy producers whom have been sidelined from the market, the unknown extent of this alleged corruption network may only come to further deteriorate their confidence in a fair market.