Emilio Lozoya, Former PEMEX Director, Will Not Walk Free Just Yet
It was widely reported that former PEMEX Director Emilio Lozoya would walk free this Tuesday, having reached an agreement to repay the NOC the funds he misappropriated between 2012 and 2016. However, the plea deal went awry at the last minute. The figure reported of US$10.7 million dollars included US$7.385 million dollars for the Odebrecht scandal and another US$3.4 million for the inflated market price purchase of Alonso Ancira Elizondo’s Agronitrogenados fertilizer plant. In exchange, both criminal proceedings were to be dropped and Lozoya was supposed to walk free from Reclusorio Norte, where he has been detained since Nov. 3, 2021, after the judge ordered him to be held in custody following his arrest by Interpol in Malaga, Spain. Payment was to be made in cash with Lozoya’s extensive real estate portfolio, some of which is suspected to have been purchased with money from Altos Hornos de México (AHMSA) bribes, serving as collateral. The defendant’s father, Emilio Lozoya Thalmann, who served as Energy Minister during the administration of Carlos Salinas de Gortari, was to act as a guarantor.
Yet at the eleventh hour, what seemed like a done deal suddenly required more time for further negotiation, with PEMEX´s team of lawyers requesting two weeks to gather more evidence. Ministerial Authorities indicated that the breakdown was mainly due to their dissatisfaction with the amount of compensation to be paid. The true cost of Lozoya’s dealings indeed dwarfs the figures leaked to news sources on Monday past. According to the Superior Auditor of the Federation (ASF), damages incurred by the state for the Agronitrogenados scandal alone was US$200 million, while just one of the Odebrecht contracts is believed to have accrued losses of US$63 million. The former PEMEX director was subsequently informed by federal officials that the deal had fallen through and would need to be revised.
Before talks emerged of an agreement, which also included cooperating by providing information relating to bribes received by legislators to push through the 2014 Energy Reform, Lozoya was facing the prospect of a 46-year prison sentence for the charges of bribery, money laundering and criminal association. Public prosecutors have thus far presented 59 pieces of evidence showing how Lozoya was the beneficiary of more than US$10million dollars of bribes from the Brazilian construction company. The money is then believed to have been laundered through family-owned businesses and hidden in offshore accounts.
Responding to the affair, Mexican President Andrés Manuel López Obrador (AMLO) said the matter was between Lozoya and PEMEX and did not concern him, but he hoped a settlement could be reached where all public money stolen was returned to the treasury. From the campaign trail through to his presidency, AMLO has made uprooting corruption a key pillar of his administration. He cites the pervasion of money laundering, bribery and embezzlement in the energy sector as a primary reason to back increased state control with the proposed new energy reform. Yet, more than two decades after Pemexgate, Mexico’s state oil company is still struggling to shift accusations of corruption. Just last week, further allegations of the state oil company’s entanglement in the Pandora and Panama Papers scandal emerged, while claims of collusion, favoritism and bribery in the awarding of private contracts persist.